NZ log market update - August 2026 [NZ]Friday 4 Sep 2026
At Wharf Gate (AWG) prices for export logs were stable in August with no change from July pricing. However, ocean freight costs remain elevated, and the NZD has strengthened against the USD during August, both of which will place downward pressure on AWG returns. Offsetting these are modest increases in log prices in China, supported by stable daily demand and relatively low softwood log inventories. The Indian market remains subdued during the monsoon period. Weak sawn timber demand, unsold log inventories and port congestion are placing pressure on sawmill margins and limiting buyers’ appetite for additional logs. The weakening INR against the USD is adding further pressure to the landed cost of imported logs, with a more meaningful improvement in demand not expected until after the monsoon and Diwali periods. The Stand Forestry Log Price Index remains at $122 which is $2 above the two-year average and $3 above the five-year average. Domestic Log Market Most domestic log processors will remove the 2% fuel surcharge on domestic sawn timber in September, coinciding with an average 5% increase in sawn timber prices. A small number of suppliers are maintaining the fuel surcharge for now, although competitive pressure may see these suppliers follow the wider market relatively quickly. Sawmill managers report that the domestic sawn timber market continues to improve as building activity gradually increases. Winter demand has been stronger than experienced for several years, with forward orders providing increased confidence heading into spring. Without the disruption and additional costs associated with elevated fuel prices, market conditions would likely have been stronger again. The improving sentiment is supported by the residential construction pipeline. New dwelling consents have increased significantly compared with last year, led particularly by multi-unit housing. While a building consent does not immediately translate into timber consumption, the increasing pipeline of consented projects provides a positive indicator for residential construction activity over the coming months. Infrastructure activity is also providing increasing support to the broader construction sector. The latest National Infrastructure Pipeline shows $71.2 billion of projects currently under construction, with approximately $17.5 billion of additional projects expected to enter construction over the next 12 months. Civil and infrastructure contractors currently have stronger forward workloads than the residential and commercial sectors. Sawmillers are therefore increasingly optimistic heading into the traditional spring and summer increase in timber demand. However, this optimism remains tempered by uncertainty around fuel and other input costs, particularly given ongoing geopolitical tensions in the Middle East. More >> Source: Scott Downs, Stand Forestry Limited  | ||
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