September AWG prices for New Zealand’s exported logs have held steady at North Island ports, similar to the prices in August. However, log exporters have reduced AWG prices at the South Island ports. Despite this, log demand in China has remained at steady levels. On the other hand, the global demand for sawn timber has been decreasing, while the domestic market in New Zealand is showing signs of recovery. The PF Olsen Log Price Index for September stands at $114. This is $5 below the two-year average and $8 below the five-year average.
In terms of the New Zealand domestic log market, there are indications that log supply is becoming tight in certain regions. This can be attributed to a combination of factors such as increased demand from the construction sector and limited availability due to harvesting restrictions. As a result, some regions are experiencing higher log prices and longer lead times for deliveries. However, other regions, particularly those with surplus supply, are not facing the same challenges.
The construction sector in New Zealand has been a driving force behind the increased demand for logs. Despite the impact of the COVID-19 pandemic, the construction industry has remained resilient, with ongoing infrastructure projects and a strong housing market. This has led to a sustained demand for logs, particularly for framing and structural purposes. Additionally, the government’s focus on housing and infrastructure development has further fueled the demand.
Furthermore, the domestic log market has been influenced by the reduction in global sawn timber demand. The COVID-19 pandemic has disrupted economies worldwide, leading to a slowdown in construction activity in many countries. This has resulted in a decreased demand for sawn timber, which has had a ripple effect on the log market. New Zealand log exporters, who heavily rely on the global market, have had to adjust their prices accordingly to remain competitive.
Looking ahead, the future of the log market in New Zealand is uncertain. While the domestic market shows signs of recovery, the global demand for sawn timber remains uncertain due to the ongoing pandemic and its economic repercussions. Factors such as international travel restrictions, supply chain disruptions, and changing consumer behavior will continue to impact the log market. However, the New Zealand government’s commitment to infrastructure development and the construction industry’s resilience provide some optimism for the sector.
In conclusion, September AWG prices for New Zealand’s exported logs have remained similar to the previous month at North Island ports, while prices have been reduced at South Island ports. Log demand in China has remained steady, but the global demand for sawn timber has decreased. The domestic log market in New Zealand is showing signs of recovery, although log supply is becoming tight in certain regions. The construction sector has been a key driver of the increased demand for logs, while the reduction in global sawn timber demand has had an impact on the market. The future of the log market remains uncertain, with various factors influencing its trajectory.