Increase in log shipments to India and South Korea for New Zealand
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In the early half of 2016, New Zealand increased its log shipments to India and South Korea while exports to china decline, according to the Wood Resource Quarterly (WRQ).
With total shipments trending higher, log export prices have gone up by 36% from September 2015 to May 2016, said the report.
The increased in shipments continues to place New Zealand as the world’s leading exporter for softwood logs followed by Russia and the US. These three countries accounted for almost 50% of globally traded logs in 2015, with a majority being destined for the Chinese market.
More than half of New Zealand's total harvest are exported in log form. In 2015, the country exported 14.7 million m³ of Radiata Pine logs, of which almost 10 million m³ was shipped to China. This was down from a record high of almost 12 million m3 in 2013, WRQ said.
In late 2015 and early 2016, Chinese log buyers became more active in New Zealand's log market with shipments increasing from 1.8 million m³ in 3Q/15 to 2.5 million m³ in 1Q/16, it added.
However, in the first five months of 2016, the total of New Zealand shipments to Asia increased slightly with 2016 year-to-date volumes being 2% higher as compared to the same period in 2015. The biggest rises so far this year have been in shipments to India and South Korea, while exports to China were down 10%.
Log export prices have also increased consistently in the past 12 months. The average log export price in May 2016 was 36% higher than its six year low in September last year. The FOB prices for the major destinations in May 2016 had converged to a range of $100-106/m³, reported WRQ.
Over the past four years, prices for logs exported to Asia have been on a roller-coster ride, averaging just over $90/m³ in 2012, reaching an all-time high of $130/m³ in 1Q/14, falling to $82/m³ in the 3Q/15 (the lowest level since 2010), then rising significantly in early 2016. These export log price fluctuations have strongly impacted the price trends for both sawlogs and pulplogs consumed by the domestic forest industry in New Zealand over the past decade.