Export calm persists through Chinese New Year, with modest inventory builds and steady pricing signals.

The somewhat positive mood through the wider forestry industry that has been noted over the past few months continued without much deviation through February, and the outlook is for more of the same over the short term.

The main talking point for this time of the year is always the Chinese New Year and what impact this will have on the log trading environment. This often has traders nervous, but this year there’s a unique calmness about future prospects. Port level log inventories were low before the holidays, and are expected to rise by less than usual by the time wood markets have fully restarted.

There’s already talk of CFR prices rising again for the business that has been signed off through the back end of last month. Though this has coincided with a rise in shipping costs, so won’t be fully reflected in wharfgate pricing in March.

Although market conditions aren’t deteriorating in China, a genuine, long-term recovery in wood demand remains unlikely for the foreseeable future as the housing market remains in an especially poor state. This is pushing efforts to expand into alternative markets such as India and Vietnam, though both are a long way from having any major influence. Progression on the potential NZ-India FTA remains slow as the NZ government requires opposition party support, given NZ First has indicated they will not support the deal.

A buoyant market continues to be reported domestically, especially for the structural timber sector, which is benefiting from the past few months’ lifts in building consents. There have also been some minor greenshots around pruned logs in the North Island too.

Talk of stronger timber demand has been backed up by the Q4 mill inventory figures, where sawn timber volumes were the lowest in five years despite sawn timber output tracking at a four-year high for the quarter. Carbon markets appear to have bottomed out for at least the short term, experiencing a minor rebound since the start of the month. Like the past two years, the government auctions are expected to be non-events through 2026.

Source: farmersweekly.co.nz