{"id":9144,"date":"2023-08-01T12:04:11","date_gmt":"2023-08-01T02:04:11","guid":{"rendered":"https:\/\/woodcentral.com.au\/?p=9144"},"modified":"2024-12-18T00:15:29","modified_gmt":"2024-12-17T14:15:29","slug":"australian-softwood-prices-drop-30-exporters-eye-china-trade","status":"publish","type":"post","link":"https:\/\/woodcentral.com.au\/australian-softwood-prices-drop-30-exporters-eye-china-trade\/","title":{"rendered":"Australian Softwood Prices Drop 30%, Exporters Eye China Trade"},"content":{"rendered":"\n

Australia’s softwood log export prices plunged 29.3% for May, according to the latest data obtained by IndustryEdge’s Wood Market Edge online.<\/a><\/p>\n\n\n\n

As prices dropped to AUDFob99.35 per cubic metre, Australia’s softwood log export recovery continues, with exports rising 3.5% to 126,275 cubic metres.<\/p>\n\n\n\n

In June<\/a>, IndustryEdge<\/a> reported that 91% of Australia’s total softwood exports in April went to India. According to the previous report, shipments to India came from several Australian states. <\/p>\n\n\n\n

Tasmania’s port in Burnie sent 19.5 cubic meters, while South Australia, from Port Adelaide, contributed 20.0 thousand cubic meters. <\/p>\n\n\n\n

Shipments also arrived from Victoria, with Portland sending 56.3 thousand cubic meters, and New South Wales, from Twofold Bay\/Eden, which exported 34.9 thousand cubic meters.<\/p>\n\n\n\n

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In a Wood Central report<\/a>, CEO of the Port of Portland Greg Burgoyne said the port used to export 1 million tonnes of logs annually to China before the bans.
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Now, India accounts for 95% of Australia’s total softwood exports – with 4% of trade to Vietnam and just 1% to South Korea.<\/p>\n\n\n\n

In the years leading up to the export ban<\/a>, China represented more than 99% of the total market for Australian softwood exports, with the ‘China Price’ effectively the weighted average price for total softwood exports.<\/p>\n\n\n\n

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Australian Softwood Log Exports by Country January 2017 to May 2023 in cubic metres. (Source: ABS and IndustryEdge).<\/figcaption><\/figure>\n\n\n\n

“For all that export volumes spiked in April and May, the price was the victim,” IndustryEdge said.<\/p>\n\n\n\n

“Trade to China may not always have been satisfactory, but the occasional slumps in export prices to India are also nothing to write home about.” <\/p>\n\n\n\n

In May 2023, exports to India averaged AUDFob97.30 per cubic metre, down 30.2% on the prior month and 3.8% lower than the price recorded a year earlier.<\/p>\n\n\n\n

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Australian Softwood Log Exports by Country: January 2017 to May 2023 (AUDFob\/m3). (Source: ABS and IndustryEdge.)
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“Should China return to the market, as expected, it will be of enormous interest to see the prices that are being returned for softwood log exports in the new era,” IndustryEdge said in a media release. <\/a><\/p>\n\n\n\n

“Especially in the context of deteriorating economic conditions in Mainland China.”<\/p>\n\n\n\n

Worrying data is emerging about the Chinese economy<\/h6>\n\n\n\n

In June, Wood Central reported on the slowdown of the Chinese economy – which has led to a drop in trade for New Zealand exporters.<\/a><\/p>\n\n\n\n

Last week the Chinese National Bureau of Statistics <\/a>reported that China’s GDP for April-June was 6.3%, lower than the economists forecast of 7.3% in a Reuters survey. <\/p>\n\n\n\n

According to Nobel laureate Paul Krugman, there are fears that China could be heading for a 1990s Japan-type stagnation.<\/a><\/p>\n\n\n\n

The economic slowdown fuelled by the softening real estate market and demographics has led to worrying Consumer Price Index (CPI) and Producer Price Index (PPI)<\/a> numbers. <\/p>\n\n\n\n

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China’s real estate prices have been in freefall for more than 18 months. (Source: National Bureau of Statistics in China).<\/figcaption><\/figure>\n\n\n\n

Australia, one of the world’s most China-dependent economies, is among the nations watching developments closely, none more so than Treasurer Jim Chalmers.<\/p>\n\n\n\n

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In May<\/a>, Wood Central reported on the worrying productivity numbers from China.<\/em> (Source: Financial Times)<\/figcaption><\/figure>\n\n\n\n

“The global economy is in a pretty precarious place right now,” Chalmers, Australia’s treasurer, told the ABC.<\/p>\n\n\n\n

“The Americans are proving to be resilient; the Chinese economy<\/a> has shown some worrying signs, Europe’s in recession and others as well.”<\/p>\n\n\n\n

The trade sector recorded weak figures; in June alone, it fell about 6%, with exports slumping 8.3% to just shy of 2tn yuan (USD 280 billion) and imports off 2.6%.<\/p>\n\n\n\n

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