Market Report for Feb 2025 - Laurie ForestryFriday 28 Feb 2025
As reported last month, there are signs of weakness in both China and India, with supply to both destinations well exceeding demand. Consumption levels are expected to pick up in both, with the expectation being some current downward price pressure risk will be averted if it does. Uncertainty prevails across all international spheres of business I am hearing about. With all eyes watching the Trump mania and just how this will all play out. The illustrious Donald might have been best to study Newtons Laws of Motion. In simple terms, had he done so he would know for every action (force) there is always an opposite an equal reaction (force).” Thus, as I mentioned last month, trade is demand and supply. Whatever force may be exerted on one, the equal and opposite reaction will be continuance done differently. Erstwhile of course it will be US consumers who will pay to ensure the forces are equalised. China remains flat as all this plays out and the resulting nervousness about exports to the US dominates. Daily consumption is weak at around 10,000 m3 as at mid-February which in part reflects workers quietly returning from their homelands after CNY. Usage will need to climb quickly through 50,000 m3 per day and inventory will need to stay below 4mil m3 to retain any level of confidence. Inventory is currently sitting at 3.9million. On a brighter side, deliveries from NZ were below expectation in first half of February at 17 and that is helping retain some levels of confidence. For the moment, the market indicator A grade is sitting at CFRUS$118 per cubic metre and no one is suggesting movement either way until the usage v supply number starts to reveal its true colours. In India, A grade has fallen from CFRUS$145 to $125 per m3 over the last 4 months, although most commentary is suggesting buyers are not lining up to issue LC’s even at the new levels. Some bonded cargos are being offered at US$115 with some stock now very old and the market attempting to use that as leverage. Daily usage numbers are weak, but all expect this to increase in the next few weeks. Some India sawmill owners use bonded cargos as a mechanism to defer duty and GST payments so some of the 103,000 m3 currently sitting in bond is not distressed cargo. Quite working out which is which would be more difficult than trying to work out what is going on inside the US Presidents head. More >> Source: Laurie Forestry | ||
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