At wharfgate prices for export A-grade logs declined an average of $22 per Japanese agricultural standard cubic metre in May to their lowest prices in 10 months.
Forestry consultancy group PF Olsen said while softwood inventory has remained steady in China, construction activity is likely to remain subdued as the country enters its hotter summer months, which generally sees work tailing off by about 15%.
Customs data shows that from January to November last year, New Zealand shipped 14.8 million cubic metres of radiata pine logs to China, at an export value of about US$2.28 billion ($3.8bn), a year-on-year decline of 13%.
China accounts for about 54% of NZ’s forestry exports, which last year were valued at $6.6bn.
PF Olsen’s log price index for May declined by $11 to $113, at its lowest level since last July and $10 below its five-year average. At wharfgate prices for pruned logs are sitting between $160 and $170 per Japanese agricultural standard cubic metre (JASm3), with export A grade at $110 JASm3.
The firm’s director sales and marketing, Scott Downs, said China has also increased supply from its domestic harvesting of Masson pine in southern and central China, and poplar from northern China, with some expected inflow from Australia following the lifting of the ban on that market.
Downs said the domestic market has also seen reduced demand.
Mills are trimming log orders on a surplus of supply in the structural market, in particular, on the back of reduced household spending.