Monthly industry report - May 2026 [NZ]Friday 5 Jun 2026
I noted my April report differed from other commentators on a key element which is the China Eastern Seaboard inventory. My reports reflect the Softwood Log inventory, the majority of which is NZ Radiata pine. This refers to all breakbulk delivered logs held in storage, in or close to ports, supplied mostly from NZ, but also including Australia, Uruguay, and the Pacific North West. As at the first week of May, the total inventory sat at 2.6 million m3, round numbers, down 100,000 m3 on my March report. The inventory is a critical market component with buyers constantly monitoring this before setting prices. A dropping inventory right now is good for the market but it must be emphasised, this is an overall number with some significant variations across ports. For the NZ log trade, Lanshan Port is the most significant as the largest destination for NZ logs. Lanshan is on the southern border of the Shangdong province. It is a central hub of many sawmills and as your average Boeing 737 flies, is about 480km north of Shanghai. The softwood log consumption across the Eastern Seaboard as at early May had slipped under 60,000 m3 per day but is better than expected for the time of year. Lanshan port is running at 27,000 m3 per day usage. Not all usage is NZ Radiata pine but still 35-40% of our total normal supply on an ongoing basis. Just to put this into context, 27,000 m3 is nearly 75% of the volume on a Handy Class logger vessel, of which there are more than 50 carrying NZ logs to China on a monthly basis. The reason Lanshan is highlighted in this report is because it is a key market driver for NZ logs with log price settlements across the Eastern Seaboard reflecting what is happening in Lanshan. Importantly, at mid-May, in the Shangdong and adjacent Jiangsu provinces bordering Lanshan, the log trader breakeven level being the difference between the wholesale prices traders get for NZ logs and what they pay kiwi exporters, has widened to about a US$7 per m3 shortfall. I doubt you will need an abacus to work out what could lay around the corner if prices in China do not lift to cover the breakeven margin and very quickly. Gently put, there is potential for supply demand forces 101 to not end well for NZ logs in June. More >> Source & image credit: Laurie Forestry  | ||
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