Industry adjustment to the new log pricing levels is continuing to take place in New Zealand. As with all adjustments this affects businesses and individuals in very different ways depending on their individual financial circumstances and the part of the sector they are operating in. Source: Timberbiz
Last month, the New Zealand Forest Industries Contractors Association (FICA) sent to its members a survey to answer pertinent questions around the log price downturn and the effect on contractors’ businesses. This indicated a significant affect in the workplace with a mix of business as usual, reduced hours and capped production.
The market has shown resilience to further price reduction and prices have improved slightly, which mirrors the pattern seen after previous market corrections.
Despite this, no-one can predict with any degree of certainty where prices might go from here, and how long current conditions could prevail.
Scion also conducted a log price survey recently. This showed a relatively high variance in industry price predictions and emphasizes the difficulty of assessing the range of different factors currently having an influence, including the US-China trade war.
Most respondents expect a continued strengthening into next year but not to the levels achieved in 2018. Volumes have responded to the price reduction and the same survey respondents are predicting a slight volume decrease in the next three months, but to return to August 2019 volumes in six months.
The New Zealand Forest Owners Association (FOA) and FICA are continuing to monitor the situation in New Zealand and offshore, and to share information. As part of this, FICA will run another survey at the end of the month to ascertain the degree of change and use this information to report back to government and support the industry if the situation worsens.
