Local log exports lift to monthly record in May

Log exports lifted to a monthly record of 553,250 m3 in May, as supply and demand factors intersected to see exports rise a massive 68% on the prior month. Demonstrating the reversal of fortunes for log exports, annualised growth was just 0.3%, reaching a total 4.189 million m3. Softwood log exports are of course, the mainstay. In May 2020, in total, they lifted 70.3% on April, to 452,527 m3.

The huge spike in monthly export volumes appears to have been recorded because while New Zealand was in a more complete lockdown than Australia, exports were largely constrained. At the same time, buyers in China – despite many holding inventory – were concerned to ensure they secured available wood supplies as they came out of their enforced period of lockdown. If not New Zealand, then Australia, may have gone the reasoning.

Despite its lockdown, data provided from IndustryEdge’s Wood Market Edge online service shows New Zealand’s exports of softwood logs recovered strongly in May 2020, lifting by almost 185% to 1.603 million m3 after plunging a huge 60% to 563,664 m3 in April. As the chart here indicates, the fall was remarkable, and though the recovery was very strong, it merely returned monthly exports to their normal level. Softwood log demand is clearly very strong.

Source: Industry Edge

Fig. 13

The next chart shows total log exports from Australia over the decade, with the red line showing year-end exports. It is clear that had May 2020 not been a record month, aggregate annual exports would have continued to trend down.

Fig. 14

To go straight to the dashboard and take a closer look at the data, click here.

The second chart shows softwood log exports over a shorter five-year timeframe. It shows those exports by type and size since January 2017 (when new trade codes were introduced).

What is relevant here is that total softwood log exports have experienced higher monthly totals only once, although way back in November 2017, the lift to a new record was less dramatic than the most recent experience.

The two prominent groups of logs are Pine >15 cm diameter (blue bar) and Pine <15 cm diameter (red bar). There is no further definition available, as to size classes within the formal data. The larger dimension logs saw a May export increase of 57.4% to total 216,713 m3, while their smaller cousins were rushed to wharf and almost doubled (up 97.6%) to 213,424 m3 over the same period.

Fig. 15

To go straight to the dashboard and take a closer look at the data, click here.

The demand pressures played a small part in a modest price uplift in May, with the average price rising to AUDFob135.65/m3.

Meantime, it is worth seeing the performance of hardwood log exports also, because although smaller in volume, they also lifted in May 2020, by nearly exactly two-thirds (66.3%) to 96,586 m3, their second highest monthly total on record. Annual hardwood log exports have been declining as the chart below shows. Despite the lift on April, at 548,288 m3 for the year-ended May 2020, exports were 21.9% lower than a year earlier.

The demand-side pressures were not limited to softwood logs, in May.

Fig. 16

To go straight to the dashboard and take a closer look at the data, click here.

The next item in Statistics Count provides an overview of recent international log pricing.