NZ Log Market Report - March 2024Thursday 28 Mar 2024
The earlier positivity had its foundations in the assumption all would be fine after Chinese New-year. It was expected daily log consumption would quickly recover to normal levels as everyone went back to work. Unfortunately, this has not happened, with daily usage struggling to reach 40,000 m3 per day in February, when the market was expecting 60,000 per day. As at mid-March, we are seeing usage numbers improve, but too little too late. The problem is NZ Forestry Inc has been delivering 60,000 m3 per day since Christmas. Radiata log inventory is now at 4 mil m3 with all softwood inventory sitting at close to 5mil. This is regarded as way too high. With demand weak and ample stock, China domestic prices for Kiwi logs are also falling. China buyers have now folded their arms and refusing orders from Kiwi exporters whilst waiting for prices to hit bottom. As at mid-March, no one knows where the bottom is with no major sales contracts signed and no LC’s issued in close to 2 weeks. This is a massively concerning situation. Around NZ, there is the beginnings of a big slow down in deliveries to Ports. This will need to happen more dramatically and for some time to enable supply and demand to get back to an equilibrium. Underpinning that is harvesting contractors and transport companies parked up again. The continuing ebb and flow of the current modus operandi model to China must change. The impacts across the people who do the real work is unacceptable. There has never been a more desperate time for NZ Forestry Inc to get in a room and lock the door until a production and supply framework is sorted out. More >> Source: Laurie Forestry | ||
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