NZ exports to China grow +12% but prices seem toppy.
The domestic NZ demand for both pruned and structural logs remains strong and supply ranges from balanced to tight around the country. Due to the drop in export prices the PF Olsen Log Price Index for July has dropped one dollar from the June figure and is now at $125. The average sale price is $14 per tonne above the three year average.
Domestic Log Market
Pruned
Mills still have plenty of pruned supply especially in CNI and Nelson/Marlborough. The usual slow-down in winter supply hasn’t occurred. This may be a function of where crews are located, or maybe we are seeing the start of increasing supply from all the 90’s established forests which were predominantly pruned. Some pruned logs may also be diverted from the export markets to the stronger domestic market.
Structural
Supply and demand for structural logs continues to be well balanced around NZ. There have been some slight increases in log prices for Q3 2017, but generally prices have remained unchanged from Q2. NZ mills have not been affected by the anti-dumping duties imposed on parts of the Canadian soft-wood lumber supply into the US.
Who are the NZ Mills exporting to?
The three largest individual markets (by value) for NZ sawn lumber are the USA, China and Australia. ASEAN countries are also an important market for NZ lumber.
>>READ ALSO: Why does New Zealand export sawn timber and logs to different markets?
Export Log Market
China
The China log market remains well balanced. Demand remains strong and customers are chasing good volumes. The China market is forecast to remain steady through Q3.
NZ log volume exports to China in 2017 have increased by 12% from 2016.
Photo credentials: Ivan Luketina, NZ.