NZ log export update

NZ log export update

Friday 24 May 2013

March was the largest month for log exports from New Zealand on record. Not only did the volume exported exceed the largest previous month, but it was over this by almost 15% at a total just exceeding 1.5 million m³. Obviously the largest portion of the volume went to China, where it was also the largest export month on record to that destination. Exports to Korea were respectable at 235,000m³ and exports to India had a big increase to 126,000m³.

While exports from most ports have been on the rise lately with more logs going to China, the most rapid increase has been from Whangarei where the share of exports from New Zealand has increased from around 17% in the quarter to March 2012 to 28% in the quarter to March 2013.

China

China’s imports are continuing at high prices and high volumes. The economy has slowed slightly in the first quarter of 2013, though how this affects exports to China is unclear. There has not been much sign of slowing of exports to the country so far. China’s importers have been following the US lumber market in anticipation of short supplies though this is yet to kick in with imports from the Pacific North West ticking along steadily.

China’s total rolling quarter log imports have increased 6% year-on-year and most of this has come from a 40% increase of imports from New Zealand. There has been a large increase from the US, though imports from Canada have remained steady over the year. However, imports from Russia have decreased 22% year-on-year, which is a very significant drop from the number one log supplier, and as this trend continues China will still make up volume from New Zealand and the Pacific North West.

south Korea South Korean imports have been relatively steady for the past year, in which New Zealand has had over 50% share of the log market for the 9 months from July through to March. In this time, the average price of logs from the Pacific North West going to South Korea has risen by 36%. This is due to the decreasing supply of cheap hemlock logs from Canada and the United States.

In the first quarter of this year the South Korean economy grew by its fastest rate in two years, though its government continue to be worried by sluggish exports. The Japanese aggressive currency devaluing is giving them a competitive advantage for exports, which is a concern for the Korean economy which is heavily based on exports. The central bank has lowered interest rates in an attempt to boost exports. This means that margins on input costs for construction, such as logs from New Zealand, will become tighter and may hurt log imports in the short term.

Source: www.nzxagri.co.nz/agrifax

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