NZ market update - July 2026 [NZ]Thursday 9 Jul 2026
With the depths of winter upon us, we are starting to see softening oil prices and reduced export related costs giving a flicker of light at the end of the tunnel. Let’s hope that light is not a train. Traditionally, the third quarter of the year sees the bottom of the log market and the emergence of some green shoots in terms of demand and price. This year appears to be a trend follower, albeit we haven’t seen the severe price reductions in late Q2 that we have in previous years. Interestingly, the bottom of the cycle has been less severe year-on-year for the past 4 years, with the bottom of the 2026 cycle only 5% below the 12-month average. This is compared to 8% in 2025, 10% in 2024 and 25% in 2023. We need to view these numbers with caution however as 2026 is only just past halfway and there’s plenty of potential speedbumps ahead which, as we know from recent events, can come out of nowhere. If we look back at the export log price history over the past 7 years it is obvious that export pricing has become increasingly more stable over time, with the previous 9 months being the most stable in memory. This doesn’t mean that stability has led to increased forest owner returns, it just means that returns are more predictable, not more palatable. June saw a reduction in spot prices of around $8/JAS (based on SNI prices), which was a result of the Trump effect. Increased war-related freight costs and foreign exchange stung the cost side. while poorer buyer sentiment saw CFR sales prices take a dip. July At Wharf gate (AWG) prices have bounced back somewhat from the June reduction into the early $120’s/JAS (A grade shorts) as all of the aforementioned factors have reversed. It is expected that August will be higher again and more reminiscent of the previous 9 months. Freight is expected to reduce later in the month from the mid $US40s to somewhere in the high $US30s, foreign exchange has taken a bath to a 7-month low in the mid $US0.56 range and the CFR price is expected to gain a couple of $US. The $US:NZ will likely be affected by the Reserve Bank’s posturing in July as they contemplate a rate hike, although the expectation of this is lower now due the economic damage from the Iran debacle. Much of our ability to lever prices higher will be a direct result of total New Zealand supply. Large-scale wind events in the upper South Island and lower North Island continue to put significant volumes of log into the market. Also, although the lower North Island salvage is now mostly complete, the Nelson/Tasman cleanup still has a way to go. This volume is not price sensitive so will continue to hit the wharves regardless of the market. What this does mean in the medium to longer term is that we now have significant holes in the longer-term supply equation. This has played out in the CNI following Cyclone Gabrielle, with a significant reduction in harvest levels around Taupo as those forests now recover from a massive windthrow salvage programme. The ability for this harvest capacity to move elsewhere is limited as there simply aren’t the large-scale opportunities anywhere else in the country (with the exception of Gisborne but that’s another story). More >> Source & image credit: Stand  | ||
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