Softwood log inventory in China has reduced by approximately 17% over the last month to 3.6m m3.
Daily log use in China is now back to the 100k to 105k m3 range after peaking at over 120k m3 at the end of October.
The CFR prices have increased for New Zealand pine logs due to solid demand, reduced supply, and lower inventory levels. The price for A grade New Zealand pine is currently around 123 USD per JASm3 and expected to increase for December deliveries.
The CAIXIN manufacturing PMI index rose to 53.6 in October. This shows the sector remains healthy. (A PMI above 50 indicates expansion and 53.6 is the highest since January 2011).
China has banned logs from the Australian states of Queensland and Victoria, stating they have detected live pests. The supply chain for spruce from Europe has increased in cost due to an increase in container costs. The price for new arrivals of spruce has increased to 110 EUR.
The longer-term supply situation may be beneficial for New Zealand logs with forecasts that 2021 will be the peak of spruce availability from Europe and a proposed Russian ban on export logs starting in January 2022.
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