The CFR prices have increased for New Zealand radiata 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.New Zealand domestic demand for logs and sawn timber remains strong with domestic sales of sawntimber exceeding projections.
The November AWG prices for export grade logs increased by 1-2 NZD per JASm3 from October prices. Market indicators for New Zealand logs in China are very good with solid demand, reducing inventory levels, and reduced supply from other countries. Log stocks will likely build in a quiet India with increased log supply.
Some regions in the New Zealand’s North Island have a surplus supply of pruned logs while there is a shortage of good construction logs in some parts of the South Island where forest owners and managers have moved harvesting crews to tidy-up wind damaged or burnt forests. The logs produced from these forests do not produce sawn timber suitable for use in domestic construction.
New Zealand’s domestic market for sawn timber across all product ranges is very strong. Some mill managers referred to the market as “cranking along”. Many mills report record levels of production and that many of their customers now have longer term forward orders for their services and products. This has previously been the case for private orders with strong DIY and house construction, and there are now longer-term orders for commercial sales as well. Some mill managers say they now have an issue finding enough trucks and drivers to deliver their products.
The strengthening NZD against the USD has reduced revenue from export sales. Mill owners and managers have medium to long term concerns about cheaper sawn timber products from Europe (spruce), Russia and China.
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