Friday, March 29, 2024

Export log prices on the rise

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New Zealand export log prices increased this month as inventories reduced on Chinese ports on lower volumes and a pick-up in demand.
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The average wharfgate price for NZ A-grade logs rose to $83/tonne from $82/t in September, according to AgriHQ's monthly survey of exporters, forest owners and sawmillers.

The AgriHQ Log Price Indicator, which measures log prices weighted by grade, increased to 88.41 from 87.83.

Prices for NZ export logs are largely determined by China, the country's largest market, where weaker demand has seen a build up of inventories.

A decline in the number of logs sent to China and a pick-up in demand has reduced inventories on Chinese ports to 3 million cubic metres from 4.7m cubic metres in August, which is supporting prices.

"While credit lines are still posing problems, consumer confidence has lifted which has helped bolster domestic demand within the Chinese market," AgriHQ analyst Emma Dent said.

"Should volumes to China remain low, and off-take from ports hold at steady levels, price increases are likely."

Still, while most participants in the survey are expecting price increases, the market remains volatile and uncertain, Dent said.

Prices and inventories heading into the Chinese New Year period in February, when ports are closed, will play a strong role in determining how the market plays out next year, she said.

Meanwhile, prices for NZ domestic logs were steady this month with pruned logs at $164/t, structural logs at $105/t, and pulp logs at $50/t, according to the survey.

Logs, wood, and wood articles are this country’s third-largest commodity export behind dairy products and meat.

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