High log prices lift NZ timber exports; Ta Ta Mu posts RMB 1.061b revenue for H1 2020

Summary

New Zealand log prices have risen steadily on strong demand from both domestic and Chinese markets. At the Port of Taranaki, large volumes of timber are stacked awaiting export. Canterbury forestry consultant Allan Laurie said China is driving the strong sales prices.

New Zealand log exports face relatively low freight and exchange-rate costs and fetch a good price in China, with prices currently at US$140 per cubic metre. 'That's a good price,' Laurie said, adding that domestic consumption is also strong. While new house starts in the main centres of Auckland and Christchurch are clearly at boiling point, other secondary cities have experienced significant growth.

Commentary

New Zealand log prices have climbed to US$140 per cubic metre, with Chinese demand the main driver. As the world's largest log importer, China accounts for more than 70 percent of New Zealand's log exports, mainly for construction and furniture manufacturing. New Zealand radiata pine commands a premium in the Chinese market due to its high yield and stable supply.

For NZ SMEs, high prices benefit exporters but warrant caution over demand fluctuations from China's property market adjustments and competition from Russian and European timber. Meanwhile, New Zealand's domestic construction boom is pushing up local log prices and squeezing margins for small and medium-sized processors. Businesses should monitor changes in Chinese port inventories and consider locking in prices through long-term contracts to guard against a potential market correction.

Keywords: New Zealand logs, timber exports, log prices, Allan Laurie, Port of Taranaki, Chinese market, US$140 per cubic metre, new house starts

Source: storxry.info