Prices for New Zealand logs are 12 percent below the five- year average on the back of overstocking, the summer slowdown in China and as spruce logs are being ”dumped” into Asia from Europe. This has seen higher volumes of logs stocked on wharves in China with prices easing, particularly following a surge in exported NZ logs post lockdown.

Scott Downs, director of sales and marketing at PF Olsen reports that log inventories had risen by 300,000- to-500,000 cubic metres over the past month, with at-wharf-gate prices for A-grade radiata logs dropping an average of $6 month-on-month to about US$110 per standard cubic metre. Downs said NZ log exporters were expecting small increases in the cost and freight price from this month, with supply likely to be restricted by reduced winter harvesting and smaller lot owners delaying their harvests until returns perk up.

But Susan Kilsby, agriculture economist, said that given the weak outlook for most economies, and physical distancing still in place in the major export market of India, she didn’t expect a lift in log export prices “anytime soon.”

Falling demand for goods manufactured and shipped globally also meant impacted demand for pallets in China, reflecting reduced need for soft timbers like the pinus radiata sourced from NZ.

Kilsby said there were also question marks around longer term construction demand in China, where fast- growing radiata was also used to make boxing for concrete construction.

Local demand for logs – Downs however, said local timber mills were busy, on the strength of a rekindled DIY market and requests for structural timber in the North Island in particular.

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