Chinese importers have resumed log buying to lift New Zealand prices. Photo / Warren Buckland
Paraphrased from ‘Log prices back on the rise’ – by Tina Morrison 11 October. NZ Herald
New Zealand log prices have lifted from a two-year low.
New Zealand export log prices have lifted from a two-year low as Chinese importers have resumed buying. China is New Zealand’s largest log market. Local returns are bolstered by a decline in the New Zealand dollar and cheaper shipping costs as a result of increased capacity.
The average wharf gate price for New Zealand A-grade logs fell to $76 a tonne in July, the lowest since April 2012, but have since increased to $80 a tonne in August and $88 a tonne in September, according to Agrifax’s monthly survey of exporters, forest owners and sawmills. This month’s survey, is also likely to show another gain.
Despite construction activity slowing, China is still buying.
“There has been an increase in buying as importers try to take advantage of the lower price but construction activity definitely seems to be down over there,” said Agrifax forestry analyst Ivan Luketina, who visited China for the Global Timber and Wood Products Trade Conference last month
“We saw that construction activity was not picking up at all,” said Luketina, who visited Chinese ports and sawmills as part of a tour organised by Canadian-based International Wood Markets Group.
“A lot of these importers have brought in more imports at the lower price but it’s not being passed on to the construction industry. Overall the construction industry seems fairly stagnant”
New Zealand wharf gate prices are being distorted by the impact of currency and shipping, with some exporters receiving $110 a tonne this month, Luketina said. The higher wharf gate price “is likely to mean more people are going to be exporting even though the inventories in China haven’t actually decreased significantly”, he said.