Log traders have continued to enjoy another month of improved demand out of China. Prices at the wharfgate have a bit more variation between ports than earlier in the year, but the national average for the A-grade benchmark came to $124/ JASm3, the highest since Q1 this year.

While there are signs that fundamental demand levels in China are slowly starting to rise, or have at least stabilised, these recent gains have mostly been underpinned by the volume of logs in the supply chain in China. Given supplies from New Zealand will likely lift, driven by seasonal weather conditions and forest owners wanting to capitalise on better pricing, the outlook for the coming months remains somewhat cautious.

There are reports that other competing nations have become more active in China too, and Chinese manufacturers are becoming nervous about what tariffs Trump may or may not introduce, neither of which inspire forecasts for further significance over the next few months. Though the Government there continues to introduce regulatory changes to revive the property market and has indicated more, larger changes are likely to be enacted next year.

Continued efforts are being made by New Zealand traders to expand business into India again, mostly to reduce our reliance on China. Though there weren’t major volumes sent there this past October, only 3% of the total softwood log shipments.

Locally, there’s yet to be any major change in timber usage, though this year’s interest rate cuts are keeping the outlook for 2025 more positive, even if any significant changes aren’t anticipated until later in the year. Quarterly on-mill timber stocks were unchanged in Q3 and 4% under last year.

This month’s major news was the announcement that Oji Fibre is proposing plans to halt paper production at its Kinleith Mill in Tokoroa by the end of June next year. It’s anticipated that 230 jobs will be affected, though pulp production will continue at the site.

It increasingly appears as though there will be some sales made at the final Government carbon auction of the year, as the spot market has positioned itself within a few cents of the $64/NZU reserve price.

Source: farmersweekly.co.nz