Log trade pays the toll for China situation

Australia’s log exports took a heavy hit in December 2020 as the first really obvious impacts of the Chinese import ban took hold. Total exports plunged 100,000 m3 compared with the prior month, falling to 196,519 m3 and recording the lowest monthly export volume since January 2017. As a result, annual log exports dropped to 4.118 million m3 for 2020, down 5.6% on the 2019 result.

As the chart shows, we need to look back to the start of 2017 to see monthly exports at the same level as those experienced in December 2020.


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


Although hardwood logs were impacted by the Chinese import ban, the majority of the pain was felt in the softwood export sector, which dominates the total market. The chart below shows hardwood log exports. It demonstrates that the market is always softer and far less reliable than the softwood trade. As a result, December’s exports of 23,809 m3 were low, but not surprising. Annual hardwood log exports totalled 583,894 m3, up 12.2% on 2019.


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


Returning to softwood log exports, it is important to note that some logs are now being chipped so they can be exported, but a fairly significant volume of logs simply has no home at this time.

China is typically 99% or more of the market for Australian softwood logs. That changed in November and even more dramatically in December, when shipments of softwood logs to China totalled 87,800 m3 and to other countries totalled 83,600 m3. Despite the efforts to supply other markets, shipments were significantly lower than in a ‘normal’ month. We can see this in the chart below showing China compared with other recipient countries, over the last decade.



The chart below, supplied by IndustryEdge from its Wood Market Edge online platform, shows what the potential impact of the Chinese export ban could be into the future, at a detailed level.



Shipments to Vietnam, Korea and India now look more likely, but it is uncertain the volumes and terms those markets can sustain against the seemingly endless needs of China’s industrial production system.

That endless demand is, of course, still being met. IndustryEdge has also supplied the following chart, showing New Zealand’s log exports over the last year. Always larger than Australia’s supply, it does seem the New Zealand trade has carried on – including into China – where the Australian trade was dropped off.


IndustryEdge noted in addition that Chinese softwood log imports in December totalled 3.948 million m3, at an average price of USDCif157.47/m3. If there was a will, there would be plenty of market for the return of the Australian softwood log exports.