{"id":16641,"date":"2024-04-03T01:56:35","date_gmt":"2024-04-02T14:56:35","guid":{"rendered":"https:\/\/woodcentral.com.au\/?p=16641"},"modified":"2024-10-21T20:19:42","modified_gmt":"2024-10-21T10:19:42","slug":"85-of-chinas-log-jam-at-ports-now-due-to-nz-timber","status":"publish","type":"post","link":"https:\/\/woodcentral.com.au\/85-of-chinas-log-jam-at-ports-now-due-to-nz-timber\/","title":{"rendered":"85% of China’s Log Jam at Ports Now Due to NZ Timber"},"content":{"rendered":"\n

New Zealand radiata pine is responsible for 85% of logs “jammed” at Chinese ports, with PF Olsen reporting that more than 3.4 million cubic metres of NZ logs now lie awaiting delivery at <\/a>China’s mega ports.<\/p>\n\n\n\n

Published on Sunday, PF Olsen’s Director of Sales and Marketing, Scott Downs, said that the daily off-take is 60,000 cubic metres per day, a slight increase from China’s Lunar New Year, “which means there are over two months of inventory in China.”<\/p>\n\n\n

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The PF Olsen Log Price Index dropped $3 in March to $122. This is $2 above the two-year average, level with the three-year average, and $1 above the five-year average.
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However, Mr Downs said log exporters still don’t understand the relationship between price and the supply curve, confirming that “the sale price for A grade pine logs in China remained stable in February in the 128-132 USD range.” <\/p>\n\n\n\n

“But even as supply exceeded demand and inventory was building through March, one exporter was still trying to price A grade at 136 per JASm3 but had to settle for 116 USD per JASm3. Even worse, forest owners didn’t slow supply down.”<\/p>\n\n\n\n

The uptake is that given log demand in China is constant, “the only correction to the current situation will be a reduction in log supply.”<\/p>\n\n\n\n

As reported by Wood Central last year, China remains the single most important market for New Zealand’s logs –\u00a0with more than 89% of raw logs leaving New Zealand for Chinese ports<\/a>.\u00a0<\/p>\n\n\n\n

Despite New Zealand’s push to reopen trade with India <\/a>and boost supply to South Korea, China dominates the export market for raw logs, sawn wood, sleeper, and pulp.<\/p>\n\n\n\n

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Last December, NZ and India held their first bilateral meetings between Minister Shri Piyush Goyal (right) from the Indian Commerce and Industry and NZ Agriculture Minister Todd McClay (left) (Photo Credit: Supplied by Indian National Government)<\/figcaption><\/figure>\n\n\n\n

Speaking to Wood Central last month, Rudolf van Rensburg, the co-author of China \u2013 Forest, Log & Lumber Outlook,”\u00a0a 197-page report produced by Russ Taylor Global and Margules Groome Consulting<\/em><\/a>, expects that raw logs to China will slowdown in the coming years thanks, amongst many things, to “an anticipated slowdown in NZ harvesting.”<\/p>\n\n\n\n

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“It’s important to note that China is coming off a softwood lumber demand peak, pre-Covid, that will likely not be matched for a very long time,” according to Mr van Rensburg, who added that “we expect that Chinese lumber exports will grow, offsetting the decline in log exports amid a ban on log exports from Ukraine and Russia, bark beetle infestations in Europe, and an anticipated slowdown in NZ harvesting.”<\/p>\n\n\n\n

The latest PF Olsen report also reports worrisome news for the local industry, with a drop in timber demand fuelled by a 28% drop in building covenants over the 12 months to February 2024. <\/p>\n\n\n\n