New Zealand Log Prices - October 2010

In-market log prices have jumped this month, to be back at April 2010 levels. Inventories have dropped in China and this is currently the primary influence on prices. A KS log is now priced at US$138/JASm3 and a KI log at US$133/JASm3. That is a jump of between US$15/JASm3 and US$20/JASm3 in the past month. China demand and pricing is continuing to drive the market for New Zealand export logs and other markets are obliged to accept the current prices to secure supply.

The Indian market appears to be following China in price and volume, however, the more established markets of Japan and Korea are expressing more caution and restricting supplies at these high prices. The strong demand and subsequent pressure on pricing is expected to continue through into the beginning of 2011, when demand typically declines for the Chinese New Year holiday period.

The Combined Agrifax Log Price Index, which measures returns from the whole forest, has edged up another NZ$2/T this month to be close to NZ$84/T. Strong rises in the export markets drove up unpruned log prices. Meanwhile, a slight softening in the pruned log prices limited this rise.

Log price changes:
North Island
  • Domestic: Pruned grades are down slightly
  • Export: Grades are up $5/T to $15/T

    South Island
  • Domestic: Prices are mostly steady
  • Export: Prices are up $5/T to $15/T

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