NZ log exports leap as prices fly

New Zealand’s log exports almost tripled in May 2020, with softwood log exports lifting 185% compared to April, reaching 1.604 million m3. Exports were at their highest monthly level in five months. In a development that underscores the importance of New Zealand’s log supply to China, the average export price lifted 8.1% to NZDFob184/m3.

The May price rise came on top of a larger (15.8%) rise the prior month. Since March, the average price of softwood logs has increased 25.2% as buyers – primarily in China – rushed to secure supply, even where their inventories were strong.

Following April’s pandemic induced trade crunch in New Zealand, log exports were always expected to recover as soon as the industry was allowed back into operation. What was less predictable – but not unlikely – was that prices would rise so sharply.

Analysis of the data on Wood Market Edge online shows the extent of both the volume declines and the price hikes, as the chart below shows. 

 

New Zealand Log Exports by Country: Jun ’19 – May ’20 (‘000m3 & NZDFob/m3)

Source: Statistics NZ

 

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