Export log prices recovering

AFTER A DRAMATIC DROP IN THE PRICE of export logs at the wharf gate in August, a mild recovery appears to be in progress.

During September, prices for unpruned saw logs increased between $4-to-$6 per JASm3, clawing back some of the $12-to$13 drop a month earlier.

The good news is that demand for logs in China remains buoyant in spite of the fragile international trade climate, with PF Olsen reporting that port off-takes remain in the region of 72,000-80,000 m3 per day. However, total softwood logs stocks in China have stayed close to 3.2million m3, which is still regarded as high.

PF Olsen’s Business Development Manager, Scott Downs, says in the company’s latest newsletter: “Most exporters are selling A-grade logs in the low US$130’s with very strong buyer resistance to anything over US$134.

“The lower log grades are more difficult to sell at the moment. The irony is that AWG prices for KI and KIS increased more than the higher grade in September, but this is mostly due to some exporters reducing the differential they had between the grades.

“There is negative sentiment around pruned logs. The CFR sale price for pruned logs a few months ago was up to US$180 and is now in the mid US$150’s. The exporters are not optimistic for a strong recovery in the near future.”

The domestic market remains steady, tracking around the same levels as last year, although timber producers have yet to see the usual Spring surge in sales to the local construction industry.

NZL