Imports of dressed sawn softwood, most of it structural grades imported from Europe, rose more than 41% over the last year, according to market analysts IndustryEdge. Compared with a year earlier, imports were more than 210,000 m3 higher. Source: IndustryEdge for Timberbiz
“Imports of dressed sawn softwood products have really spiked over the last year.” Tim Woods, managing director of IndustryEdge told Daily Timber News.
“That is no surprise because of the closure of the Morwell sawmill in Victoria late in 2017, but it is important for the market.”
IndustryEdge says the increased imports are almost entirely structural grades of sawn softwood, filing what would otherwise be a market gap.
“We estimate that the structural market is now around 18% supplied by imports,” Mr Woods said. “It is debatable, but our view is that at around 15% or more, the imports are able to be price makers in the right conditions.
“We think those conditions exist now. Imports have increased to fill a market gap, but at the same time, in Australian dollars, they are on average 6.6% cheaper on a free-on-board basis than they were a year ago.”
The average price of dressed sawn softwood imports was AUDFob591.20/m3 in July 2018. IndustryEdge points to average prices falling at exactly the point where the imports began to rise.
“The thing about that is that the lower average import prices were probably unnecessary anyway, but they don’t sit well alongside a depreciated Australian dollar. We frankly expected average import prices to rise through the first half of 2018,” Mr Woods said.
Inclusive of roughsawn softwood imports, the other factor IndustryEdge points to is that almost all of the import growth has been from Europe.
“Really the only story in sawnwood right now is imports from Europe,” Mr Woods said. “The European producers, mainly from Estonia, Germany and Sweden, have built and are sustaining solid positions in the Australian market. Price appears to be a common lever in those transactions.”
Average import prices for dressed sawn softwood products from those three countries, in July, were: Estonia AUDFob432.05/m3, Germany AUDFob376.59/m3 and Sweden AUDFob376.73/m3.
Every month, IndustryEdge publishes Wood Market Edge, Australia’s only forestry and wood products market and trade analysis, and supplies its customers with hundreds of unique data products, advisory and consulting services. Find out more at www.industryedge.com.au
