Sawn softwood sales softened in 2018

Domestic sawn softwood sales totalled 3.107 million m3 in 2018, down 0.1% on 2017’s result, but 2.2% lower than the annualized peak reached in August 2018. Invariably low for seasonal reasons, monthly sales in December, totalled 175,134 m3, approximately 12.0% lower than in December 2017. Sales data for the year-ended January 2019 shows a decline of 2.2% compared with the prior year, confirming the easing trend is underway.

These clear signs of local sales falling are shown in the chart below, to the end of 2018.

fig1

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

The annualized red line certainly displays the declines, but in some respects, the blue, monthly sales, bars provide the greater interest. Seasonality aside, there is no escaping that sales in December are the lowest in at least five years.

That said. Local sales are coming off record levels, and as the second chart shows, were at their third highest level in 2018. On an annualized basis, sales peaked in 2016, at 3.138 million m3.

fig2

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

Observably, the last three years have seen aggregate sales at similar levels, but the make-up of those sales has clearly changed. The table below shows the sales data for each of 2016 and 2018, with the differences for each grade or product displayed. 

Aggregate decline over the two years may be just 1.0%, and just less than 31,000 m3, but the change in the grades is more substantial.

 

  2016 2018 % Change
Outdoor Domestic 271,805 243,041 -10.6%
Fencing 94,139 117,507 24.8%
Appearance 14,668 14,511 -1.1%
Structural < 120mm 756,355 716,231 -5.3%
Structural > 120mm 57,503 60,854 5.8%
Treated Structural < 120mm 683,477 713,817 4.4%
  Dec 2017 YoY Dec 2018 YoY  
Treated Structural > 120mm 76,074 50,830 -33.2%
Landscaping 146,899 151,834 3.4%
Poles 26,815 32,958 22.9%
Packaging 506,131 573,476 13.3%
Ungraded 279,232 316,940 13.5%
Export 224,552 114,878 -48.8%
Total 3,137,649 3,106,878 -1.0%

Although there are larger proportional changes, the grades or products showing the most extensive change in sales volumes are the Structural products. Examined in this light, it is difficult to escape the impression that substitution is occurring from the (untreated) Structural <120 mm to the Treated Structural <120 mm staple product. The untreated product sawn sales fall 40,124 m3 while the treated product’s sales rose 30,340 m3.

When we put the Structural products together, total sales declined 31,677 m3 over the two years. That is almost exactly the same as the aggregate decline in sales.  When considered in the light of the latest sales forecasts – see the next item – the role of Structural products in the decline in total sales is no surprise.

In January 2019, sales totalled 191,246 m3, down 16.3% on January 2018. Annualised, sales were down 2.2% to the end of January, falling to 3.070 million m3, their lowest annual total since July 2016. Most products experienced declines, except for fencing, packaging and ungraded products, with the implication being that supplies into dwelling construction are impacted most.