New Zealand export log price fell in August as demand in China weakened, with inventories more than double the normal level. Source: IHB
According to nbr.co.nz, and quoting AgriHQ’s monthly survey of exporters, forest owners and sawmillers – the average wharf gate price for New Zealand A-grade logs declined to NZ$84 per tonne in August down NZ$2 from July.
The AgriHQ Log Price Indicator, which measures average log prices weighted by grade, slipped to 88.70 from 89.17.
As nbr.co.nz reported, logs exported from New Zealand became cheaper with inventories in Chinese ports rising to 4.7 million tonnes from 3.8 million tonnes last month, and more than double from the normal level of about 2 million tonnes.
Combined with lower demand during the country’s summer season, it caused the price for New Zealand A-grade logs delivered to China to fall to US$98/JAS, the lowest price since AgriHQ started collecting the data in September 2012.
“The lower New Zealand dollar and reduced shipping rates are a bright spot for exporters, buffering the impact on prices at the wharf gate,” said AgriHQ analyst Emma Dent.
“Market participants are not confident in the Chinese market at present. Buyer confidence is at an all-time low, along with a turbulent stock market and slowing economy. Most are expecting to see demand pick up through September. However, until inventories clear, a price recovery will remain out of reach.
“Prices for New Zealand domestic logs fared better.”
Pruned logs remained unchanged at NZ$163 a tonne as demand continued to exceed supply in the central North Island.
“While some mills are still reporting an influx of pruned logs, overall there is still a shortage,” Dent said. “That saw North Island pruned logs fetch a premium of NZ$166 a tonne over South Island logs at NZ$155 a tonne,” she said.
“The price for structural logs slipped to NZ$105 a tonne from NZ$106 a tonne the previous month as demand weakened over winter.
“Market participants are expecting to see demand pick up as we head into summer.
“The housing shortage, along with recent building statistics, show that demand is still there for structural logs.”
The value of wood exports fell 11% to NZ$3.56 billion in the year through June according to Statistics New Zealand.