NZ log market report - June 2025Friday 4 Jul 2025
Log demand has remained relatively constant within the 50-60k m3 per day range, despite the start of the Chinese summer when construction activity usually slows down. More recent log supply from New Zealand has dropped by about 10% causing log inventory levels to reduce in China. Domestically, winter continues to cast a damp shadow over the construction sector, with minimal activity or optimism on the horizon. Despite this, log pricing has remained consistent. The PF Olsen Log Price Index remains at $116. The Index is currently $2 below the two-year average, and $5 below the five-year average. Domestic Log Market The New Zealand domestic log market continues to face tough conditions, compounded by the seasonal winter slowdown and an oversupply of structural sawn timber. Building activity remains subdued in both the residential and commercial sectors, as higher interest rates and tighter credit conditions constrain demand. Sawmills are operating cautiously, maintaining lower log intakes to match reduced throughput. While there has been no major movement in domestic log prices, any upside for the third quarter appears unlikely. Most mills are signalling flat pricing through July and into early spring. Structural log grades remain in steady supply, though volumes of pruned logs are more variable depending on regional harvesting programs. The pulp market remains weak, with prices under pressure due to low demand from paper and packaging manufacturers. Export Log Markets - China CFR prices for A-grade logs are around USD 113–115 per JASm³ for July log vessel arrivals. Although demand is low by historical standards, it remains consistent at 50,000–60,000 m³ per day. Seasonal factors—including high heat and rainfall—are likely to further suppress construction activity in the coming months, potentially easing demand slightly. Between January and April 2025, New Zealand exported 5.89m m³ of logs to China, down just 4% year-on-year. China’s inventory levels continue to drop, aided by a larger more recent 10% reduction in New Zealand supply, particularly from the South Island. In this same four-month period, China imported a total of 570k m3 of logs from Japan. While this is a year-on-year increase of 26%, Japan still only accounts for a relatively small portion of China’s total log imports, representing just 7% of the 7.97m m3 imported during the same four-month period. Japan has a strategy to increase the harvesting of its plantation forests to 20% over the next decade, due to 40% of the population being affected by pollen allergies supposedly largely caused by ageing cedar and cypress plantations. This volume has mainly replaced the volume that was coming in from the United States. More >> Source & image credit: PF Olsen --(2022)2.jpg) | ||
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