Small sized softwood logs were exported at an average price of AUD144.70/m3 in July, the price having risen 20% on the prior month. Typically, the larger dimension logs are higher priced, reflecting the extra value in sawlogs and peeler logs. Source: IndustryEdge for Timberbiz
That is still true, but the gap narrowed in July, reflecting the value that exists for all wood fibre in global markets right now.
For export, logs are recorded as larger or smaller than 15cm diameter. Larger dimension (>15 cm diameter at the small end) logs dominate exports, and in July, they accounted for almost 83% of total exports. The reported export volume was 231,226 m3 at a reasonably consistent price of AUD149.15/m3, and just 4.5% higher than for the smaller dimension logs.
Smaller dimension (<15 cm diameter at the small end) log exports totalled 48,518 m3 in July. This was the lowest export total since this data series commenced in January 2018. The lower volume may have helped push prices up, but as the chart shows, they were moving up anyway.
IndustryEdge’s view is that the trends are important with this data. In general, total exports are declining, but more significantly, the major falls are being recorded for the smaller dimension logs. These logs also display greater price variability than the larger dimension logs.
One factor that is important to consider is how prices are moving in US dollar terms. As best the market is understood right now, almost all transactions are in US dollars. The chart of US dollar movement sis fairly similar to that for Australian dollars, but it is more accentuated.
Overall, the market for Australia’s softwood logs is clearly very strong. Growing prices are evidence of that. What is less clear at the moment is whether the near convergence of prices for the different sized logs will be short lived, or if all fibre is equally valuable in the international market.
We will know more next month.
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
