NZ log market report - May 2026Friday 29 May 2026
May At Wharf Gate (AWG) prices for export logs at New Zealand ports remained unchanged from April. Softer market conditions in China and rising shipping costs continue to pressure exporter margins, with parts of the export supply chain absorbing some of these costs to maintain AWG pricing and fulfil vessel commitments. In China, softwood log inventories remain relatively stable, reflecting balanced supply and demand conditions. However, weakening furniture sales are beginning to reduce demand for traditionally sought-after higher-value pruned and appearance-grade logs. Domestically, sawn timber demand remains firmer than at the same time last year despite the introduction of fuel surcharges across many timber product categories. Reduced domestic processing capacity following mill closures over the past year has also helped tighten supply and improve market balance. The PF Olsen Log Price Index remains at $122, which is $2 above both the two-year and five-year averages. Domestic Log Market Domestic log processors have introduced a 3–4% fuel surcharge on sawn timber across most product segments. The surcharge is being reviewed monthly and is expected to remain in place while fuel costs remain elevated. Demand has remained relatively resilient despite these higher prices. However, the industry remains cautious heading into winter, when construction activity and timber demand traditionally soften. Supply has tightened considerably following several mill closures over the past year, removing more than 400,000 m³ of annual production capacity from the domestic market. This reduction in supply has improved the market balance for suppliers. Sawmillers report that current demand conditions are firmer than at the same time last year, particularly for structural timber and packaging grades. Nevertheless, the sector remains sensitive to any slowdown in residential construction activity or further increases in operating costs. China CFR prices for A-grade logs from New Zealand are currently in the range of USD 126–127 per JASm³ for the larger exporters. Most exporters have accepted price reductions of approximately USD 2 per JASm³ in recent weeks as market conditions have softened. Softwood log inventories in China have remained relatively stable in the 2.4–2.7 million m³ range. Softwood log imports totalled 2.204 million m³ in April, an increase of 0.9% from March. Total hardwood and softwood log imports reached 2.98 million m³, up 7.9% month-on-month and 1.7% higher than April last year. As noted in last month’s report, this period typically sees elevated export volumes from New Zealand due to a full schedule of working days in March and favourable harvesting conditions prior to the onset of autumn weather. Daily log offtake in China remains steady at approximately 55,000–60,000 m³ per day. Softwood sawn timber imports continue to weaken significantly. April imports fell 32.8% year-on-year to 967,000 m³, while cumulative annual imports were down 12.5% year-on-year. China’s Caixin Manufacturing Purchasing Managers’ Index (PMI) rose strongly to 52.2 in April, indicating improving manufacturing activity. The index is based on a survey of more than 500 purchasing managers from large manufacturing companies, with readings above 50 indicating expansion in business activity. More >> Source: PF Olsen  | ||
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