PF Olsen NZ log market report – June 2024Friday 5 Jul 2024
Despite continued high shipping costs, small but consistent log price increases in China meant At Wharf Gate (AWG) prices in New Zealand rose by about 6 NZD per JASm3. CFR log prices in China rose about 6 USD per JASm3 through June and these price increases are expected to continue in July. Log inventory levels in China continue to fall slowly but steadily, while daily log demand remains steady at 70k m3 per day. Domestic demand for logs remains weak as we continue through the New Zealand winter. The PF Olsen Log Price Index increased from $113 to $116 in June. This is $3 below the two-year and three-year averages, and $4 below the five- year average. Domestic Log Market The total value of building work undertaken in New Zealand in Quarter 1 was 8.4b NZD. This is only down 1% compared to the same quarter last year. However, due to significant cost inflation the actual total decrease in the volume of work undertaken will be higher than 1%. We await the Quarter 2 figures, but market participants expect a further drop. Many mills have reduced their output of structural lumber in particular, and there is no indication of demand improving during Quarter 3. Export Log Markets - China China log inventory continues to reduce slowly, and daily port off-take remains around 70k per day. The average sale price for A grade pine logs in China increased through June from 116 to 122 USD per JASm3. Exporters expect modest increases in log prices through July. The China Caixin Manufacturing PMI increased in June to 51.7 from 51.4 in May. (Any number above 50 signals manufacturing growth. This is the seventh consecutive month of expansion in factory activity and the fastest pace since June 2022. Input costs rose to the highest level since October last year. Output costs increased as companies passed on their rising costs to clients. The value of China’s exports rose by 7.6% in May compared with the previous year. This is a positive sign for steady log demand. However, ongoing slow construction activity means the demand level will remain capped below previous high levels. Steel exports of 9.6 million tonnes was the highest monthly total since 2016, albeit at a declining average sale price. Slow domestic construction meant many steel producers looked abroad for markets due to the weak domestic demand for steel. More >>  | ||
Copyright 2004-2024 © Innovatek Ltd. All rights reserved. |
