Sawn Softwood Sales Stability Surprises Some

After a year of sustained growth, strength and commentary about booming residential dwelling approvals, sales of sawn softwood have barely moved for the year ended May 2015, compared with 2014. At 2.656 million m3, to the end of May, recorded sales were just 0.5% higher than the 2.643 million m3 recorded for the year ended May 2014.

As the chart below, from the FWPA Data Dashboard, shows, year-end sales of sawn softwood now appear to have peaked in mid-2014 and will continue to decline over coming months.


The certainty of decline can be observed in the trend. Leaving aside the year-end volumes, which are starting to turn down, since July 2014, when sales peaked at 260.7 km3, its been downhill since, including on a month-to-month comparative basis.

For instance in May 2015, reported sales totalled 220.7 km3, down 13.3% from the sales reported in May 2014. It has been that way since February and the trend looks set to continue throughout most of the remainder of 2015.

Having peaked almost a year ago and subsequently having declined, Australia’s softwood sales could be indicative of production capacity having been reached and subsequently, left wanting for opportunities.

We say left wanting because softwood roundwood sales continue to grow, as outlined later in this edition of Statistics Count. Their value was 3.2% higher for the year ended May 2015, compared with the year ending May 2014. Perhaps the opportunities for domestic processing are in part being reduced by less wood being available for them to process?

Sales of domestic product are only part of the picture of domestic consumption. Imports are an increasingly important part of the supply picture in Australia. Indeed, their rise over 2015 year to date is starting to cause consternation in the domestic industry. This relates more, it is important to note, to the price of some of the imports, than it does to the fact of imports themselves.

Growth in imports of sawn softwood, as displayed in the chart below, have been very strong over the last year or more. Here, imports are displayed by value. For the year to the end of May 2015, imports were valued at AUDFob1,676.2M, up 24.5% compared with the year to the end of May 2014.


It is notable, as the details below display, increases have been across the board, with all grades exhibiting growth.


Grades showing strong growth for the year to the end of May 2015 compared with the prior corresponding period are evident in the chart. They include 4407.10 – Sawn Softwood (up 28.8%), 4409.00 – Wood Mouldings (up 25.6%) and 4418.00 – Builders’ Joinery (up 25.3%).

If nothing else, the very consistent growth in the value of imports is a contrast to the dip in domestic sales. It is difficult to avoid the conclusion that in a period where domestic dwelling approvals remain strong, a decline in domestic sales is directly linked to an increase in imports.

For further details on domestic softwood, go to the FWPA Data Dashboard.

For further details trade import, go to the FWPA Data Dashboard.