Australia’s diesel crisis might have pushed the country’s largest harvest-and-haulage operators to the brink, but it has yet to materially lift prices for the treated and untreated structural timbers used to build houses nationwide. That is according to new data from Forest and Wood Products Australia, which revealed that structural timber prices fell across the March quarter, even as wholesale diesel nearly doubled in the wake of the Iran crisis.
The data were drawn from the Australian Institute of Petroleum’s pricing data to trace the diesel surge from late February into late March, a five-week run that stoked concern across manufacturing, logistics, and transport. Yet its data showed that both treated and untreated structural timber prices, which dominate Australian house framing, fell against the final three months of last year.
“Most businesses are unlikely to pass these higher costs fully on to consumers,” the FWPA report said, with firms absorbing part of the impact through margin compression whilst closely monitoring market conditions. A sustained run of elevated fuel prices over the next 6 to 12 months would force a more gradual adjustment, the report said, with partial cost pass-through running alongside operational efficiencies.
It comes after the federal Government moved on the supply side before the quarter closed, halving the fuel excise and reducing the heavy vehicle road user charge to zero for three months to relieve the squeeze on haulage operators. The data for January to March, therefore, captured a window that largely predates the point at which the fuel-cost pressure would feed through freight, treatment, and distribution contracts.
That matters for the national debate over housing affordability, where timber has repeatedly been cited as a driver of rising construction costs. The FWPA quarterly does not support that claim — “price data indicate that timber prices have not been a primary driver of cost increases,” the report said, with structural timber falling across the March quarter since the fuel crisis began.
Please note: This is part of a special series covering the fuel crisis in regional Australia. For more information, click here for Wood Central’s exclusive coverage.
