A weaker timber market in China, rising transport costs and exchange rate impacts have contributed to a drop of more than 20% in New Zealand AWG log prices in June 2022. New Zealand (AWG) log prices fell by an average of $23 between May and June. At the same time, costs for timber harvesting contractors are rising rapidly.

The New Zealand PF Olsen Log price index fell $11 to $111 in June, $11 below the two-year average, $9 below the three-year average and $13 below the five-year average.

The domestic log market in New Zealand has remained stable in the second quarter, but rising inflation will weigh on log prices in the third quarter. Forest owners can already expect to see significant increases in costs for timber felling contractors due to increases in fuel and wages.

New Zealand domestic mills begin processing slow-moving orders for New Zealand domestic sawn timber. Due to the early influx of European timber into China, exporting sawn timber to China is difficult.

Over the past month, log exporters’ shipping costs from New Zealand to China have dropped by more than $10 per JASm3 on average. Vessel congestion has eased in New Zealand, which will also benefit AWG prices in some ports.

Timber supply shortages are starting to appear in Europe as a result of the Russian and Belarusian timber bans and the Russian-Ukrainian conflict reducing supplies from Ukraine. European timber supplies to China may slow, which could be an opportunity for New Zealand’s sawn timber producers.

Russia, Belarus and Ukraine account for nearly a quarter of the world’s timber supply and 53% of EU sawn timber imports in 2021.

Softwood log stocks in China fell from 5.6 million to 5 million last month. Daily port log shipments have risen from 70,000 to 85,000. CFR prices for Grade A logs are currently between $145 and $150/JASm3 and appear to have bottomed out at $145.

The Caixin China Manufacturing PMI rose to 49.1 in May from a 26-month low of 46.0 in April. This also beat the market forecast of 48.0. While growth is good news, the PMI remains below 50, and while still in contraction territory, the pace of contraction has at least slowed. It may be a positive signal for the domestic timber market.

The post New Zealand log export prices to China fall more than 20% in June appeared first on Global Wood Markets Info.

Sign Up for Our Newsletters

Get notified of our top breaking news

You May Also Like

The European sawmill industry is skeptical about the third quarter of 2022

The first months of 2022 were very positive for the industry thanks…

Belgium: Worries about availability of wood; prices on the rise

Wood traders in Belgium are currently experiencing an unusually high demand for…

The European sawmill industry is skeptical about Q3/2022

The first months of 2022 were very positive for the industry thanks…

SCA reports sharp fall in its wood division on lower prices and higher costs

SCA’s wood division saw a 30% fall in EBITDA in 2022 compared…