Growing bigger
Log prices up as sector ‘hums’
Ntry sectors keeping humming”.
Shipping rates advanced by a small margin but appear to have plateaued and may ease in coming months, exchange rates had moved in New Zealand exporters’ favour, and demand from overseas markets was good across the board, he said.
Demand from China, the country’s largest wood export market, was positive with imports of New Zealand softwood logs up by 25 per cent in the first quarter of this year, compared with the same period last year.
“China is still displaying very good interest in logs, as it has throughout this year so far,” Brick said. “Chinese log imports are tracking at quite a high level.
“Thankfully this has been matched by an equivalent lift in offtake at ports, which has prevented log inventories from ballooning out and subsequently impacting on pricing.
“It’s not often that demand will fall back significantly from this point in the year, which bodes well for the coming months.”
Brick said there was little to suggest either the export or local log markets would suffer from any significant weakness in the future.
In the domestic log market, he said “all demand fundamentals remain well placed, and it’s difficult to imagine a scenario where they’d move away from their current path. There is some slight slowing reported among the construction sector, but this is related to the seasonal change in weather rather than any pure market weakness”.
Forest products are New Zealand’s third-largest commodity export group behind dairy and meat products. Exports of log, wood and wood articles increased 15 per cent to $4.14 billion in the year ended March 31. The latest data for April is scheduled for release by Statistics New Zealand tomorrow.