Log prices in NZ expected to rise

Posted by on Sep 5, 2017 in forest business, wood market, wood trade |
Log prices in NZ expected to rise

According to Scion Log Price Outlook – August 2017, unpruned log prices are going to trade 5% higher than August prices. The same situation is expected for pruned log prices. Infrastructure management and the availability of truck drivers appeared to be among the most important transport related constraints that may negatively impact business in New Zealand. Read more…

Scion’s quarterly log price outlook, based on sixty New Zealand based and international participants with exposure to different parts in the supply chain, has been recently presented. The outlook reports the results of the survey performed in August 2017, where participants were asked what will happen in coming future on the log market in NZ. Results are remarkable.

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Unpruned log prices

According to Scion’s report, the majority of participants expect unpruned log prices to trade 5% higher than August prices. More than 47% of participants expect higher prices over the next 12 months.

unpruned log prices NZ Scion

Among factors, making unpruned log prices to trade higher, participants pointed, among others, increasing demand from China and India, increasing lumber prices in US and tariffs on Canadian timber and potential tightening of supply due to over cutting in some regions of NZ. In addition, exchange rate, conflict with North Korea and China’s debt burden was pointed by many experts as important factors that may shape future in coming months.

>>READ MORE: NZ exports to China grow +12% but prices seem toppy.

Pruned log prices

Pruned log prices are also expected to rise as participants forecasted higer prices for pruned logs consistently over the past four outlooks, but a ceiling value of $183 is never exceeded. Only 28% of participants expect lower pruned log prices, according to recent Scion’s Log Price Outlook.

pruned log prices NZ

Transport constraint

Scion’s survey included also a section about tranport related constraints that may negatively impact business in New Zealand in coming months. Among all constraints, infrastructure management and the availability of truck drivers were very high on the list.

Source: SCION. Aug2017-Outlook. For more information contact: Carel.Bezuidenhout@scionresearch.com