Timber Tumble: China’s Softwood Log Supply Shrinks Amidst Construction Woes and Pricing Woes

China's Softwood Log Inventory Drops to 3m m3 with Radiata Pine from New Zealand Leading the Way, Port Off-Take Remains Steady at 70k per Day - Construction Activity Expected to Stay Strong Despite Hotter Months, Say Experts

China’s Softwood Log Inventory Drops as Construction Remains Consistent

China’s softwood log inventory has decreased to approximately 3 million cubic meters, with New Zealand’s radiata pine accounting for about 2.75 million cubic meters. Despite this, port off-take has remained steady, ranging around 70,000 per day.

Typically, construction activity drops by 10-15% during the hotter months of June to August. However, most commentators believe that such a significant drop will not occur this year since construction is already at a lower yet consistent level. Additionally, there is low inventory throughout the supply chain, so daily port off-take will not decrease at the same rate as productivity.

The CFR price for A-grade radiata remains around $150 per cubic meter. While China’s demand for softwood logs has been affected by the pandemic, the country’s construction industry has remained resilient. Although the pandemic has caused disruptions in the supply chain, China’s demand for softwood logs has remained relatively stable.

According to industry experts, the pandemic has led to an increase in demand for softwood logs from China’s domestic market. The country’s construction industry has shifted its focus to the domestic market due to the pandemic’s impact on international trade. This shift has led to an increase in demand for softwood logs from China’s domestic suppliers.

The decrease in China’s softwood log inventory has not affected New Zealand’s exports significantly. New Zealand’s forestry industry has experienced a strong demand for its products from China, with radiata pine being the most popular. Despite China’s reduced inventory, New Zealand’s forestry industry has continued to supply softwood logs to the Chinese market.

Overall, China’s softwood log inventory has decreased, but the country’s construction industry remains consistent. While the pandemic has affected the global supply chain, China’s demand for softwood logs has remained relatively stable. The decrease in inventory has not significantly impacted New Zealand’s forestry industry, which has continued to supply softwood logs to China’s domestic market.

John O Mahony

John O Mahony

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