June 2018 will be remembered, in the Australian wood resources trade at least, as the month that the average price reached a new record and topped AUDFob200/bdmt for the first time since it crept there for one month only, in March 2010. Source: IndustryEdge for Timberbiz
The new record average price – AUDFob201.98/bdmt – was achieved with the average price for shipments to China reaching AUDFob208.21/bdmt, and the average price in to Japan also resting above AUDFob200/bdmt.
Although not all Chinese ports have participated in the price frenzy, most have done so, and all have experienced price increases as the chart below shows.
We know that some will demur, but the data tells one simple story: China is the leader on hardwood chip pricing, as well as volume.
Hardwood Chip Export Prices to China by Port of Delivery: Jul ‘17 – Jun ’18 (AUDFob/bdmt)
Source: ABS
Export prices for hardwood chips destined for Japan have been more patchy, across the ports of delivery as can be seen below.
Hardwood Chip Export Prices to Japan by Port of Delivery: Jul ‘17 – Jun ’18 (AUDFob/bdmt)
Source: ABS
The table shows Australia’s hardwood chip export prices to the major ports for both China and Japan, over the last three months.
Australian Hardwood Chip Export Prices to Major Chinese and Japanese Ports: Apr ’18 – Jun ’18 (AUDFob/bdmt)
Source: ABS
The next chart shows the recent price experience on a species basis. It is not immediately clear in the chart, but the trend line for hardwood chips is more stable than that for softwood chips.
Woodchip Export Prices by Species: Jul ’12 – Jun ‘18* (AUDFob/bdmt
Source: ABS
* from March 2016 to May 2017, Softwood chip price data was unavailable
Analysis suggests that this continued and consistent pattern of hardwood chip price growth arises from the larger volumes exported, but also from the role that a clearly dominant buyer plays in the market. Chinese demand essentially ensures a bench sits under the price of hardwood chips.
If nothing else, China’s leadership role in this resources trade is now confirmed.
Every month, IndustryEdge publishes Wood Market Edge, Australia’s only forestry and wood products market and trade analysis, and supplies its customers with hundreds of unique data products, advisory and consulting services. Find out more at www.industryedge.com.au
