NZ market update for June 2025Friday 13 Jun 2025
Longer term fixed price deals now play a large part in the private woodlot sector with a significant number of owners opting for certainty rather than chasing rainbows with monthly spot prices. Longer term pricing mechanisms have also provided some certainty to the harvest contractor base with more consistency around future work programs. The good news is that the in-market log inventories in China have reduced again in May by around 150,000m3 to 3.35Mm3, although uplift from port has also reduced to slightly over 60,000m3/day, down 10,000m3/day from April. There’re no surprises with the reduction in uplift as the Chinese construction sector (or what’s left of it) historically slows during their hot season, however, this will be met with reduced supply from NZ courtesy of our wet season and lower spot pricing. The tariff can is still being kicked down the road and reports are that engagement from China has dwindled in recent weeks. Where this will land is anyone’s guess and it’s hard to see any sort of resolution in the short term. If you look at China with your macro glasses on, there are some interesting stats starting to emerge. China’s trade surplus surged to a record of $US165 billion in the first quarter of 2025, up 350% from $US47 billion for the same period on 2024. Much of this is thought to be due to the growth of e-commerce and tech but it does show the economic powerhouse that China has become when compared to a US trade deficit of $US425.5 billion for the same period. Federated Farmers obviously wanted something to talk about at the Fieldays and launched an attack on forestry with a very misleading ‘Save our Sheep’ campaign. The Fed’s and their broken record have pointed to forestry as the reason that the sheep flock has reduced from 70 million in 1982 to 25 million today. This is some pretty brave logic considering that total exotic forested area is still less than it was in 2002 when sheep numbers had already dropped to 38 million. Maybe, just maybe it’s not economic to farm sheep in some regions anymore and people are destocking and changing their choice of crop as a result? Just a thought, why are beef numbers not dropping, maybe beef is a better value proposition than sheep in those regions? More >> Source & image credit: Marcus Musson, Forest360 --(2022)2.jpg) | ||
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