The export log prices in New Zealand kept firm during October due to low shipping rates and a growing demand from China, the country’s largest export market.
The average wharf gate price for New Zealand A-grade logs advanced to $113 a tonne in October, from $111 a tonne in September, as WoodWeek reported, following a AgriHQ's monthly survey of exporters, forest owners and saw millers.
Thus, the relative low cost of shipping, together with the fluctuations in the exchange rate and the demand from overseas markets made New Zealand’s forest products the third-largest commodity export group behind dairy and meat products.
China’s higher demand for logs has a positive level, helped by lower inventory levels and demand from the construction sector in the country.
"Moderate inventory levels mixed with solid demand through China is acting to keep unpruned log prices at the wharf gate steady, aided by low and stable shipping rates," AgriHQ analysts Reece Brick and Shaye Lee said in their report.
Prices for pruned logs bucked the trend, following an increase in the supply of lower quality pruned logs from owners of smaller woodlots who felled trees at a younger age than usual, causing sap-staining on the wood. The average wharf gate price for pruned logs slipped $3 to $159 a tonne, while the domestic price weakened by $6 to $184 a tonne, as WoodWeek reported.
The weaker Chinese interest in pruned logs has been felt in New Zealand’s domestic market as “a portion of pruned logs that would have been sent to the wharf gate only a few months ago are now being retained for sale within New Zealand. These lower quality logs are providing additional options for local mills, and in turn pulling domestic pruned log markets downwards,” explained the analysts at AgriHQ.