New Zealand log prices
In-market log prices are reduced slightly this month. However demand is still strong as shipping prices have lowered. The in-market log price has lowered 1-2% for the products Agrifax monitors, however the cost of shipping in $/JASm³ has lowered 5-6%. Inventories
remain stable with supply and off-take well balanced. In the hot summer month’s inventories usually rise, however lowered supply from the Pacific North West has meant less build-up of stock. This is likely to lead to some increase in log prices in the short term as the seasonal demand increases and inventories are not yet built up to match.
Prices are falling in India as supply has far outweighed consumption. The decrease in supply of Pacific North West (PNW) logs to China has been caused by more favourable prices in South Korea. This has attracted a huge increase in volume of PNW logs in to South Korea. This in turn has meant lower demand from South Korea for New Zealand Radiata pine. This combined with India working its way through a large amount of logs in stock leaves New Zealand prices very much following the currently favourable demand in China.
The Agrifax Log Price indicator moved down 1 point to 82 points this month. Prices have been firm over most grades this year. While the New Zealand dollar has risen in the past month shipping rates are falling rapidly with the Baltic Dry Index falling 43% in the last month. This has helped exporters who are making the most of high pruned log prices.
In the North Island pruned grades are mostly up, as are structural and industrial grades. This however is being offset in the index by falling prices in the K export and pulp grades. Prices are mostly steady and changes are small so an index change of 1 point is not a large difference. The Agrifax Log Price Indicator is currently above both 1 year ago and 2 years ago levels. The Index is above the 2010 year to August average but below the 2011 year to August average. For more detailed reports contact NZX Agrifax at www.nzxagri.com/agrifax
The Agrifax log price data is a weighted average of prices collected each month from a range of New Zealand log buyers and sellers. Log prices shown in the table will vary regionally and by supplier and should only be used to provide a broad trend of log price movements.