China’s record-breaking heatwave, which has so far caused a power crisis and a major slowdown in construction activity, is to blame for a decline in log demand at ports (down from 60,000 cubic metres in June to 50,000 in July). That is according to Scott Downs, New Zealand-based PF Olsen’s Director Sales and Marketing, who reports that a drop in demand from China (due to heat) and India (thanks to monsoonal weather), resulting in the the export market for radiata pine remaining largely in step, due to in large part to reduced harvest volumes (caused by poor weather across NZ).
“In the domestic market, New Zealand sawmills continue to face pressure from rising operational costs,” Downs said. “Carter Holt Harvey (CHH) has announced an upcoming price increase for structural sawn timber, effective from October,” whilst Moody’s revised global outlook for the forest products sector has been changed from stable to negative, citing the combined impact of rising tariffs and weakening demand: “This shift presents challenges for NZ’s export-reliant forestry sector, particularly in the pulp, panel, and sawn timber markets,” he said.
“Tariff increases in key markets have disrupted trade flows and added cost and complexity across the supply chain. New Zealand exporters are facing tighter margins as raw material and freight costs climb, while buyers reassess sourcing strategies amid geopolitical and economic uncertainty.”
Scott Downs, PF Olsen’s Director Sales and Marketing
According to Downs, softwood log imports from Europe dropped 59% for the first half of 2025, down more than 1.14 million cubic metres over the same period in 2024: “Strong prices persist, but buyers face margin pressure from weak demand and high raw material costs,” Downs said. Whilst at Wharf Gate (AWG), prices for New Zealand export logs rose only 1 NZD per JASm3 in July, as currency shifts offset higher CFR prices.
- To learn more, click here to download PF Olsen’s latest Log Market report published on Friday. And to learn more about the impact of Trump’s tariffs on more than NZ$358 million worth of radiata pine traded from New Zealand to the United States, click here for Wood Central’s special feature from April 2025.
