Forest360 NZ market update - July 2024Friday 2 Aug 2024
‘Survive to 25’ seems to be the new catchphrase around the country, especially in the primary sector. It probably wouldn’t have made a great political campaign slogan, but it does sum up the general feeling around the traps. July hasn’t delivered any surprises in terms of export prices, with another minor lift of around $5/JAS across the board. This brings the A grade price at Southern North Island ports to around $117/Jas, a few more dollars for Napier and Marsden, and those unfortunate folks that supply Lyttleton are not quite in triple figures yet with $99/JAS. There’s nothing new in the news from China. The property market is still as big a problem to the CCP as Darleen Tana is to the Greens. New house prices fell for the 13th consecutive month, which has dragged the country’s economic growth down from a growth projection of 5.1% to 4.7%. This highlights the unwillingness of the Chinese populace to invest in property even though the government has released a hoard of stimulus packages including lower interest rates and reduced minimum deposits. It is expected that policies will continue to be relaxed but, with around 80% of the country’s household wealth held in property, and enough empty, newly built floorspace to rehome the entire country and still not touch the sides, it’s unlikely that we’ll see any significant increase in construction in the short to medium term. It’s becoming more obvious that China’s fibre demand is shifting to furniture and packaging as traditional construction markets disappear. Southern China has previously consumed NZ supply at around 3.5Mm3 per annum, however, this has dropped to well under 1Mm3 as the region switches to more manufacturing and usage of the region’s short rotation Eucalypt species. The changing utilisation of our product is resulting in tightening of log specifications and less demand for the lower grades of KI and KIS. NZ supply into China has dropped significantly in the past month, however this is only having a minimal effect on port inventories as uplift has tanked to around 55,000m3 per day from 65K in June due to flooding in South China compounding what is a usual off-season. Current inventory is sitting at around 3.2Mm3 which hasn’t dropped as quickly as expected, giving sellers less leverage for price increases. Shipping rates continue to be stubbornly high and there’s not much sign of easing with the continued ruckus in the Suez Canal. More >> Source & image credit: Forest360  | ||
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