According to feedback from New Zealand timber traders, the trend of New Zealand's log export price is small** from the fourth quarter of 2023 to January 2024.
However, in the view of New Zealand timber traders, New Zealand log exports may be better without the impact of the Red Sea crisis. But now, ships need to go around Africa, and the sailing time has been increased by about 18 additional days. At the same time, the conflict in the Gaza Strip and the ongoing Russia-Ukraine conflict have put pressure on international oil prices, resulting in an increase of $3-4 per cubic meter in the cost of chartering logs for export.
According to the analysis of industry insiders, the fluctuation of New Zealand's log exports is not only affected by international sea freight and international importance, but also the supply and demand of China's domestic timber market is also an important factor.
It is understood that in the past five years, the average annual output of logs in New Zealand has been maintained between 30 million and 34 million cubic meters, 65% to 70% of the products are exported, and 30% are digested by New Zealand domestic processing plants such as sawmills, plywood and MDF factories. 40% of the wood products processed domestically in New Zealand are exported, with the remainder destined for domestic consumption.
Among New Zealand's log exports, China imports nearly ninety percent of its total exports, South Korea accounts for 8%, and the rest is equally shared by countries such as Japan, India and Vietnam. It can be seen that New Zealand is extremely dependent on the Chinese market. In this context, changes in demand in the Chinese market have a significant impact on New Zealand's log exports**.
New Zealand's Grade A Log Cost and Freight Rate (CFR) exports to China have been at the level of $90 to $190 for the past decade, while in 2023 this has fluctuated to between $105 and $140. In January 2024, ** remained at $128 cubic meters.
Between October 2023 and January 2024, the CFR** from New Zealand logs to our country has quietly climbed, from $115 cubic meters to the current $128.
Although New Zealand's log exports fluctuate, in the view of New Zealand timber traders, the current level may be a medium-term peak, although in the current international economic situation this trend is difficult to maintain, but the obvious change in the number of orders in the past four months shows that the demand in the Chinese market is still strong, which provides strong support for New Zealand's log exports.