Softwood ≤120 Dips (a little) as H2F Surges

The mainstay of Australia’s sawn softwood sector has long been the Strucutral <120mm grade. Although it remains the major grade, its dominance is under serious and sustained challenge from the H2F grade and its additional properties and more flexible utilisation, due to its treatment. That competition, as much as anything else, has seen the Structural <120 grade decline by almost nothing, just 0.02% or just AUD179,000 over the course of the year to the end of May 2015, compared with the prior year.

Whether it’s a demand factor, imports or the comparative supply factor with H2F, sales of Structural <120 amounted to 759.6 km3 for the year ending May 2015. This was their lowest level since the year ended May 2014, but it is not suggestive of seasonal factors. As the chart below shows, year-end totals have begun to decline.


For further details, go to the FWPA Data Dashboard. 

Equally relevant, compared with May 2014, sales of Structural <120 were 15.0% lower in May 2015, amounting to 62.4 km3. The chart above is more than adequate in displaying the medium term decline. Taken on its own, this gradual decline would represent very bad news for the domestic sawn softwood sector.

However, the H2F grade is, in many respects, the same product as the mainstay Structural <120. It has grown as its sibling grade has declined. Importantly, its growth is linked to innovation that delivers more outcomes that was once the case.

H2F’s success, in numbers, has seen it grow 15.2% for the year ended May 2015, compared with the year ended May 2014. Its annual sales to the end of May were 533.1 km3, declining a modest 1.1% compared with the year to the end of April 2014. This is displayed in the chart below.


For further details, go to the FWPA Data Dashboard. 

Although it is a small dip in year-end sales, the H2F decline is telling, coming as it does as evidence of the decline in sales of Structural <120 has become clearer and more pronounced. 

Taken together, sales of these two grades have grown very strongly. For the year ended May 2014, they accounted for 46.2% of the total. A year later, their combined share had grown to 48.7%. It will not be long before they technically dominate (hold more than half the market). When they do, we can bet that it is H2F that will have grown most of all.