Global wood markets will see another changeup in the coming months as Australian exporters can again ship logs to China following a 2.5-year ban. But exports are not expected to reach historic levels seen a few years ago. Sources: Resource Wise, Timberbiz
At the end of 2020, China banned the importation of plantation pine logs from Australia.
China’s decision to ban Australian logs resulted in a collapse of Australian exports. China was practically the only log market being served by the country. As a result, total annual shipments from Australia fell a shocking 89% in 2022 compared with 2016-2020.
When the ban was implemented, Australian log traders started exploring other spaces in Asia and nearby markets. In 2021, they began shipping to previously less significant markets.
As reported on WoodMarket Prices, these included the following countries:
- India
- South Korea
- Vietnam
However, the jump in shipments to those markets was short-lived. A sharp drop occurred in 2022. This occurred partly because of increased competition from US log exporters.
The decline continued in the early part of this year with a 76% decrease in shipped logs between 2022 and 2023. Without China’s demand, Australia had a serious amount of trouble staying competitive in global wood markets.
Australia can likely resume trade with China now that the ban has been lifted. But shipments will probably not reach levels seen in the past.
Previously, a large share of the pine logs Australia shipped to China was of lower quality. The rating was somewhat close to “pulplog” material-type wood.
This standard was less desirable for Australian sawmills. However, the domestic industry in Australia will increasingly compete with the export market for small-diameter logs. The change comes as log supply tightens across the country.
Pine plantations have only seen limited growth over the past 30 years (0.3% annually). Using this trend, it’s safe to assume that domestic timber supply is unlikely to increase in the coming decades.
In addition, many large pine plantations were destroyed by fires in 2019 and 2020. The total losses were roughly 6% of the plantation area.
The damages will limit log availability even more for domestic sawmills in the next few years. This will likely create a surge in lumber demand.
As lumber demand goes up, Australia will have to respond to meet it. They can achieve this in three ways:
- Upgraded sawmills that can utilize smaller logs and increase their lumber yields.
As sawmills invest in upgrades, they will better handle the wood needed to meet demand. Over time, this will improve the country’s ability to keep up.
- Increased lumber imports.
If the country can’t keep up with demand, they will have to look into imports. Don’t be surprised if Australia begins to up its lumber imports.
- Decreased log exports.
The China ban will yield long-term impacts on Australian lumber. Now that the country’s demand is going up, the need to export will decrease.
The China ban will yield long-term impacts on Australian lumber. Now that the country’s demand is going up, the need to export will decrease.
