Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


NZ log prices may have reached lows after supply eases

NZ log export prices may have reached lows after supply eases, Agrifax says

By Tina Morrison

June 27 (BusinessDesk) - New Zealand export log prices to China, which have dropped by about a third to $87 a tonne in the past three months, may start to stabilise next month as supply eases, slowing an inventory build up on the ports of Asia's largest economy, according to Agrifax.

Log inventories on Chinese ports have more than doubled since the start of the year to about 4 million tonnes, which equates to about two-and-a-half months' usage, as an expansion in China's housing market led to a surge in supply from exporters wanting to benefit from higher prices, according to Agrifax forestry analyst Ivan Luketina. A slowdown in the Chinese housing market has caused prices to drop and led to tighter credit for log buyers, denting Chinese log imports, he said.

"House sales in China are slowing down and the flow on effect from that is that the banks are less willing to lend money out for development or buying houses, and that means earlier on in the year there was a dip in usage of the logs," Luketina said. "The dip in usage earlier in the year combined with the massive imports has caused the inventories to really grow quickly. The inventories need to come down, and that should be starting to happen now."

Government figures today showed New Zealand exported $4.14 billion of logs, wood, and wood articles in the 12 months ended May 31, up 24 percent from a year earlier.

Chinese log inventories may not return to more normal levels for at least four months and prices are unlikely to rise before then, Luketina said. A correction following a spike higher in 2011 took about 20 months to recover, suggesting the latest price recovery would likely take a slow, consistent path, he said.

The price decline may be welcomed by the domestic market where mills have struggled to compete for wood with exporters, Luketina said. However, while industrial and utility log types will probably follow the decline in Chinese export prices, structural and pruned grades are likely to decline only marginally as demand remains strong in the Christchurch and Auckland housing markets, he said.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

I Sing The Highway Electric: Charge Net NZ To Connect New Zealand

BMW is turning Middle Earth electric after today announcing a substantial contribution to the charging network Charge Net NZ. This landmark partnership will enable Kiwis to drive their electric vehicles (EVs) right across New Zealand through the installation of a fast charging highway stretching from Kaitaia to Invercargill. More>>

ALSO:

Watch This Space: Mahia Rocket Lab Launch Site Officially Opened

Economic Development Minster Steven Joyce today opened New Zealand’s first orbital launch site, Rocket Lab Launch Complex 1, on the Mahia Peninsula on the North Island’s east coast. More>>

Earlier:

Marketing Rocks!
Ig Nobel Award Winners Assess The Personality Of Rocks

A Massey University marketing lecturer has received the 2016 Ig Nobel Prize for economics for a research project that asked university students to describe the “brand personalities” of three rocks. More>>

ALSO:

Nurofen Promotion: Reckitt Benckiser To Plead Guilty To Misleading Ads

Reckitt Benckiser (New Zealand) intends to plead guilty to charges of misleading consumers over the way it promoted a range of Nurofen products, the Commerce Commission says. More>>

ALSO:

Half A Billion Accounts, Including Xtra: Yahoo Confirms Huge Data Breach

The account information may have included names, email addresses, telephone numbers, dates of birth, hashed passwords (the vast majority with bcrypt) and, in some cases, encrypted or unencrypted security questions and answers. More>>

ALSO:

Rural Branches: Westpac To Close 19 Branches, ANZ Looks At 7

Westpac confirms it will close nineteen branches across the country; ANZ closes its Ngaruawahia branch and is consulting on plans to close six more branches; The bank workers union says many of its members are nervous about their futures and asking ... More>>

Interest Rates: RBNZ's Wheeler Keeps OCR At 2%

Reserve Bank governor Graeme Wheeler kept the official cash rate at 2 percent and said more easing will be needed to get inflation back within the target band. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news