NZ Log Market Review - September 2025Friday 3 Oct 2025
After a six-month spending freeze, the New Zealand Government has committed more than NZD 1.1 billion to public-sector construction projects. This is a welcome boost that could provide a lifeline for the country’s struggling timber processing industry. At Wharf Gate (AWG) prices for export pine sawlogs were steady in September. Prices for sawlog pine remained the same as August prices, while pruned pine logs and Douglas fir lifted on the back of reduced inventories in China. Log stocks and prices in China have remained stable, with daily demand increasing as construction activity gains momentum in cooler conditions. Increased ocean freight costs will be partially offset by a weaker NZD against the USD. The PF Olsen Log Price Index rose to $121, sitting $2 above the two-year average and in line with the five-year average. Domestic Log Market The New Zealand Government has emphasised infrastructure investment as a central feature of its 2025 Growth Budget, with planned spending across construction, transport, health, and regional development. This includes NZD 600m for defence housing, 413m for fast-tracked school infrastructure and 100m to modernise hospitals. In parallel, the Fast-Track Approvals Act 2024 is designed to accelerate consenting for large-scale infrastructure, housing, and development projects, potentially reducing delays and lifting project throughput. A draft 30-year national infrastructure plan has also been released, forecasting capital investment to rise from approximately NZD 20 billion currently to more than NZD 30 billion by the 2050s, targeting critical needs in hospitals, electricity, resilience, and transport. These policy measures signal stronger demand prospects for structural framing timber, formwork, and infrastructure-related wood products in the medium term. However, the timing of any material uplift remains uncertain, with many projects still in planning or consenting phases. Government procurement standards and sustainability policies could swing more demand toward sawn-timber and engineered wood products if “low-carbon building” becomes a stronger priority. Export Log Markets - China CFR prices for A-grade logs remain in the range around USD 115 per JASm³ for October vessel arrivals. Prices for pruned logs increased about USD 10 per JASm3 due to the low inventory of pruned logs. The larger P40 pruned logs now sell around the USD 160 per JASm3 range. Log demand in China has increased slightly over the last month to just over 60,000 m³ per day. As expected, log demand has increased due to increased construction activity as temperatures drop in China. Domestic prices in China are also stable. Softwood log inventories have decreased slightly and now sit at approximately 2.45 million m³, of which radiata is approximately 2.18m m3. There is currently less Douglas fir stock in China as a significant proportion of this supply was from the Nelson region. The harvest in this area is now concentrated on salvaging the windthrown pine, with a small amount of Douglas fir harvested to sustain local mills. The Caixin China General Manufacturing PMI slipped into contraction in July, falling to 49.5 from 50.4 in June - a reversal that undermined expectations of sustained momentum. More >> Source: PF Olsen  | ||
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