Summary
Log export prices have been rising since December 2023, with positive market sentiment. The industry expects steady export growth to China in Q1 2024. In the first 11 months of 2023, China imported 42.540 million cubic metres of New Zealand logs, up 2.05% year-on-year, but the value fell 13.93% to RMB 14 billion.
November arrivals were 1.8 million cubic metres, up for two consecutive months. Radiata pine imports were 15.51 million cubic metres, accounting for 95% of total New Zealand log imports and 44.6% of China's total log imports, with average price down 15.71% to RMB 857 per cubic metre. Douglas fir imports increased 18.66% to 604,000 cubic metres, with average price down 17.55% to RMB 904 per cubic metre.
Other conifer imports rose 42.54%. New Zealand domestic stocks fell below 2.9 million cubic metres, the lowest since January 2021, representing about 8 weeks of supply. CFR prices are at USD 126-128 per cubic metre, up over USD 10 in one month.
Sawmills reported a slight rise in December sales. Cyclone Gabrielle has led to increased harvest volumes, but timber production is expected to slow in May-June 2024.
Commentary
This news is a clear positive signal for New Zealand timber exporters. Rising prices and low inventories strengthen bargaining power, especially as radiata pine dominates Chinese imports with stable demand. However, note that the 13.93% value decline in 2023 reflects price pressure, and the post-cyclone production surge may not be sustainable.
From a small business perspective, seize the Q1 price window but closely monitor changes in China's property and infrastructure demand. Another angle: strong growth in Douglas fir and other conifer imports indicates China is diversifying supply; SMEs could consider species mix adjustments or value-added processing. On the risk side, the expected mid-year production slowdown may tighten supply, requiring advance inventory and logistics planning.
It is advisable to watch CFR price trends and lock in long-term contracts with Chinese buyers to stabilise returns. Conclusion: With low inventories and rising prices, Q1 is undoubtedly an opportunity for NZ log exports, but caution is needed on the sustainability of China's recovery.
Keywords: New Zealand logs, China log market, Radiata pine, CFR price, export improvement, low inventory, Cyclone Gabrielle, timber production, import data
Source: Baijiahao
Disclaimer: This article is compiled from publicly available sources for general information only. The analysis and commentary are editorial opinions. MiDeer Observer does not guarantee the accuracy or completeness of the information provided. Readers should seek independent professional advice before relying on this content, or contact us for more information.
