Softwood log exports hit new annual record

In October 3, 2017

Australia’s softwood log exports recorded a new annual high of 4.244 million m3 for the year-ended July 2017. Exports for the month of July totalled 488,911 m3, the second highest monthly volume ever, behind the record 511,275 m3 recorded in May 2017, according to the authoritative monthly Wood Market Edge.

As Australia grapples with mill closures and medium and long term shortages of softwood logs in most regions, the IndustryEdge team routinely answers subscriber questions about the nature and destination of these log exports.

The chart below shows total softwood log exports by country and also shows the moving annual export volume, so the magnitude of the rise in exports is clear. China continues to be the primary destination for Australia’s softwood log exports.

 

Since the start of 2017, softwood log exports have been recorded on the basis of their diameter. Logs are recorded on the <15 cm diameter and >15 cm diameter basis.

As can be observed below, for the 7 months to the end of July, logs of <15 cm diameter accounted for 32.1% of total exports (833,333 m3), while the larger diameter logs accounted for 67.9%.

Differentiation of Softwood log exports based on their diameter allows for some form of pricing analysis, which at the most rudimentary level is displayed in the next chart. Over time, this data will become more refined, as the amount of data available grows, and the market becomes more familiar with this differentiation by log size.

In July 2017, the average price of Softwood Logs <15 cm diameter was AUDFob89.29/m3, while for the >15 cm product, the average price was markedly higher at AUDFob155.07/m3.

The chart shows that in early months, there was no price differentiation, but since May, prices have diverged increasingly widely as the market becomes more familiar with the new arrangements and shipments are sized for purpose

As subscribers to the complete data series would be aware, there is more detail available, based on species distinctions, but this preliminary analysis provides useful information about a large and growing export market.

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Reprinted by agreement with IndustryEdge, the publisher of the monthly, subscription only Wood Market Edge and Pulp & Paper Edge. Go to www.industryedge.com.au for further updates and complimentary resources.

Contact IndustryEdge at info@industryedge.com.au or +61 3 5229 2470.

 

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