Demand for NZ pruned logs is now at a 30-year high, with China turning the tap off low-value and unpruned logs, following a 15-year run of strong demand. That is, according to John Turkington, a 30-year forest veteran who spoke to RNZ yesterday.
“Things have fundamentally changed in my view in China. And this is where we are going to be at,” Turkington said, adding that “the crashes are getting closer and closer together, and the range of prices is becoming more and more marked.”
“So you used to fluctuate around a $20 spread – now it’s more like $60 (between the high and low prices).”
Export log prices are now at an eight-year low, with Mr Turkington suggesting that NZ plantation owners pivot from unpruned to pruned logs.
“Pruned logs per tonne are sort of sitting firmly at $200 or north of $200; it depends where it is sold to,” he said. “Whereas the A grade, the predominant diet in China, is sitting in the early $100s.”
He said the bonus with pruned logs was that they were turned into products and then sent offshore, so the “value add happens in NZ, which is another bonus.”
In March, Wood Central reported that the golden age of log exports could be coming to a close, with China pivoting from log to lumber exports.
According to Rudolf van Rensburg, the co-author of China – Forest, Log & Lumber Outlook, a 197-page report produced by Russ Taylor Global and Margules Groome Consulting, the shift comes “amid a ban on log exports from Ukraine and Russia, bark beetle infestations in Europe, and an anticipated slowdown in NZ harvesting.”
Earlier this month, Wood Central reported that NZ’s weak domestic demand for timber was a risk to the country’s $3.6 billion log export industry – with NZ’s radiate pine exports still jamming China’s shipping ports.
- To learn more about China’s pivot away from log exports and the global scramble for wood, click on Wood Central’s special feature.
