Export log supplies from New Zealand as for the start of 2025 were at a record high, with mild concerns that the market may be oversaturated as a result.

Last month was relatively quiet in terms of market movements, which is to be expected as Chinese traders have mostly been away on holiday while the domestic market has continued to mostly trade on quarterly contracts signed at the start of the year.

The big news at the start of February was United State President Donald Trump’s move to introduce an additional 10% tariff on all Chinese goods, then just a month later on March 4 he upped it to 20%.

Export log supplies from New Zealand during January were at a record high for the month and there are mild concerns that the market may be oversaturated as a result, though we’ll need a few weeks of normal operations in China before we have a clearer picture of the demand situation.

For wharfgate log values, it’s been nothing but good news for harvesters. Both the low exchange rate and shipping costs have combined with stable CFR rates to place A-grade logs in the low-to-mid $130/JASm3 range in the North Island and upper South Island.

Domestically, it’s mostly been more of the same. While there’s been the odd report of improvements in housing starts following steady reductions in the official cash rate, the return to normal operations for mills nationwide has added extra supply to the market and usually kept timber prices either stable or otherwise weaker.

Those who opted to prune trees have continued to be well rewarded as up to $230/t have been paid for P1 logs in large parts of the North Island. This continues a trend that started mid-last year, with the differential between these and S1 logs among the largest on record in percentage terms, and the largest in raw dollars per tonne.

As expected, Oji confirmed the closure of the paper division of its Kinleith mill. But in some brighter news, the mothballed Juken Gisborne mill has been bought and is set to re-open, producing a variety of products for the Australian market.

Carbon markets have been largely stable over the past month, essentially holding within a dollar of $63/NZU since the start of the month. This is $5 short of the reserve price for the first government auction of the year, which will be held on March 19.
       
Source:  farmersweekly.co.nz