Log export prices rose another 2% over the past month with solid offtake in China amid seasonally low inventories, which bodes well as the Chinese go into celebration mode during the next couple of weeks to celebrate their New Year.
New Zealand export log prices hit another record high in January, as strong demand from China, lower shipping rates and a favourable currency kicked in at the same time.
The price for A-Grade export logs lifted to $131 per tonne from $129 in December. Market intelligence analyst, AgriHQ, says this is the highest level recorded since it began collecting the data in 2008.
The average export price for pruned logs jumped to $176/t from $170/t last month and marking the highest level since July 2016, AgriHQ says. Wood pulp prices also rose a further 1% over the previous month.
In the New Zealand domestic market, prices have generally remained flat compared with the previous month for all log grades with the national average for structural logs at $129/t, pruned logs at $182/t and roundwood at $97/t.
AgriHQ says this shouldn’t be taken as an indicator of the longer term trend, with all reports suggesting first quarter contracts have lifted by as much as $5-$7/t for higher value unpruned logs, especially through the central North Island.
The usual combination of exceptional export pricing and solid domestic demand have been quoted as the main drivers behind these increases, says AgriHQ.
Meanwhile, recently released figures for New Zealand exports and imports for the full 2017 year show that earnings from the forestry sector hit new highs last year.
Statistics New Zealand says exports of logs, wood and wood articles advanced 13% to $4.7 billion in the 2017 calendar year.
China set the pace for 2017, with log exports to that market rising 29% in value over the previous year. Our other two big export log markets, South Korea and India, both rose 1%, while the value of logs exported to Japan jumped 45%, albeit from a fairly low base.