PF Olsen NZ log market report - February 2026Friday 27 Feb 2026
February At Wharf Gate (AWG) prices at New Zealand ports were largely unchanged from January. Lower shipping costs earlier in the pricing cycle and modest CFR price increases in China offset the strengthening of the NZD against the USD. The NZD has since eased slightly from its January highs and, unlike recent months, currency movements are expected to have minimal impact on March AWG pricing. However, shipping costs are now trending upward. Reduced import cargo volumes into New Zealand have limited back-loading opportunities, increasing freight rates for outbound log vessels.Log exporters are therefore seeking higher CFR prices in China to recover rising freight costs. The PF Olsen Log Price Index remains at $121, sitting $2 above the two-year average and in line with the five-year average. NZ Domestic Log Market The gradual recovery in New Zealand’s construction sector continues, although activity remains well below peak 2021–22 levels. Building consent volumes have stabilised after significant declines through 2023–2024, and there are early signs that residential activity may be approaching a cyclical floor. Sawmillers report steady demand across structural and industrial grades, supported by:
Mortgage rates have eased from peak levels, and improved business confidence is contributing to more stable building enquiry levels. However, developers remain cautious and new housing starts are still constrained by financing conditions and cost pressures. Overall, while the recovery is slow, domestic sawn timber demand conditions in early 2026 are firmer than at the same time in 2025. China Softwood log inventories in China increased during the Chinese New Year (CNY) period as expected and are currently estimated at approximately 2.8 million m³. The increase of 500,000–600,000 m³ over the holiday period is materially lower than seasonal norms, reflecting delayed vessel arrivals from New Zealand due to earlier weather-related harvesting disruptions. Log supply from New Zealand is now expected to increase as harvesting activity normalises. The interaction between rising New Zealand supply and the pace of post-CNY demand recovery will determine whether inventories trend higher or stabilise in March. Immediately prior to CNY, CFR prices for A-grade logs were aroundUSD 117/JASm³. Exporters are now seeking higher CFR prices to offset increasing freight costs, though the ability to secure increases will depend on post-holiday demand momentum. China’s plywood exports rose 7% in 2025 to a record 12.99 million m³, of which 78% was hardwood plywood. Interestingly, hardwood log imports declined 25% year-on-year, indicating greater utilisation of domestic resources and alternative supply channels.Chinese exports of lower-priced laminated veneer lumber (LVL) into Australia have increased, placing downward pressure on pricing in that market. The Caixin Manufacturing PMI rose modestly to 50.3 in January, supported by improved new orders. However, business sentiment weakened to a nine-month low amid ongoing concerns around property market weakness and export growth. Infrastructure fixed asset spend in China has remained positive (mid-single digit growth) but spending in transport, utilities, energy and urban renewal projects is less timber intensive than residential construction. This has contributed to the relatively stable base line demand but will never replace the peak demand during the construction boom. More >> Souce: PF Olsen | ||
Copyright 2004-2026 © Innovatek Ltd. All rights reserved. |
