NZ market update - December 2025

Friday 12 Dec 2025

 
With 2025 almost put to bed, it’s time to start contemplating what next year might look like in our market space. This year has been the most stable in terms of price that we have seen since 2018 and, although the prices are not super appealing compared to the golden period a few years back, stability does provide certainty. This certainty is in the form of consistent work programs for contractors, consistent supply for our exporters and domestic sawmills and predictable returns for forest owners.

So, the 64-million-dollar question is what will next year be like? Predictions like this are always dangerous without the gift of hindsight, but my bet would be more of the same. There’s nothing out there that would give an expectation of an increase in demand from China. India may give rise to some additional demand as real GDP is running at 8.2%, and they are slowly getting their port infrastructure into this century. The long-anticipated FTA will help as returns to India are still marginal and fumigation remains problematic with their requirements for Methyl Bromide. There is therefore a glimmer of hope but nothing bankable or of scale at this stage.

Vietnam probably holds the most potential with demand increasing steadily, however the problem there is the lack of port infrastructure for break bulk vessels meaning most logs have to be containerised, which is expensive and to top that off, the Vietnamese don’t want our lower Ki and KIS grades. Unfortunately, once you’ve sold the eye fillet, it’s sometimes hard to sell the bladders and brains, so any significant volume increase into Vietnam will require a bladder and brains solution.

Forest360, Export A Grade at Wharf gate price chart

Taking the above into account, China is still, by far, our most important trading partner for forest products. While we have lost a significant amount of harvesting infrastructure in the past few years, successive windblow events, such as the one in Nelson, continue to put excess volume into a market that doesn’t really want it. If you look up the word ‘commodity’ in the dictionary you’ll probably see a photo of a log and to that extent, the rules of supply and demand affect log prices directly.

It’s unlikely that Chinese demand will increase significantly, if at all, in the short to medium term, so we need to be very careful with our supply position post new year, especially around the traditional Chinese New Year Celebrations when the market basically stops for the best part of 3 weeks.

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Source & image credit: Forest360



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