Log export updateFriday 22 Mar 2013
Log exports of around 900,000 m³ were good for January, as a result of the continued strong demand from China. There was 571,583 m³ exported to China in January, 85% higher than the 5 year average for January. Prices have continued to move slowly upwards. There was less movement from February to March as there has been a break for the Chinese New Year but at-wharf-gate prices for A-grade logs are up by around 1%. The New Zealand weighted average is now NZ$101/tonne, though prices out of Tauranga, where most of New Zealand’s logs are exported from, have reached $118/tonne. In the last month New Zealand prices have been helped by shipping costs staying low and the dollar dropping by around 2 cents more than in-market prices. There are also reports of the dry weather aiding logging, though in some areas logging has been restricted due to fire risk. The weather may also have an effect on tonnes to volume conversion rates. China China’s demand for New Zealand wood continues to be strong and appears set to continue this year. The market fundamentals point towards more New Zealand wood being exported to China, competitors Russia, Canada and the US are supplying less, port stocks are low and overall consumption is remaining level within China. So rather than an increase of demand in China, it is a structural change that will see New Zealand get more of the market share, if the US housing recovery proves to be as predicted. After a slight slowdown in China’s economic growth in 2012 the International Monetary Fund is predicting GDP growth of 8.2% during 2013. This should continue to support use of timber as the Chinese leadership looks to invest in infrastructure domestically to stimulate some of this growth. A-grade logs have been in high demand and are fetching up to $110/JAS at-wharf-gate in the North Island. The increase in demand last year for pruned export logs has continued and export pruned prices are currently still at very high prices at around $145/tonne, higher than was seen during 2012. Pacific North West US log exports to China were larger than normal for January, though the total for 2012 was well down on 2011. This is likely a result of the strengthening of the domestic market for US logs as housing recovers. US exports to China were down 26% and total exports were down by 15%. This means that the proportion of US exports that go to China has dropped by 13% from 2011 to 2012, as a result of strengthening markets elsewhere. Canadian exports to China have, however, remained largely the same from 2011 to 2012. The US housing recovery only started to increase towards the end of 2012 so it is possible that this effect is yet to have a large effect on exports and will be seen in the first half of 2013. In British Columbia political pressures are likely to see export taxes raised on logs in an effort to rebalance the export log trade with domestic processing to create more jobs in Canada. Source: www.nzxagri.co.nz/agrifax  | ||
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