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

 

Wine: 20% Of Marlborough Storage Tanks Damaged By Quake

An estimated 20 percent of wine storage tanks in the Marlborough region, the country’s largest wine producing area, have been damaged by the impact of the recent Kaikoura earthquake. More>>

ALSO:

ACC: Levy Recommendations For 2017 – 2019 Period

• For car owners, a 13% reduction in the average Motor Vehicle levy • For businesses, a 10% reduction in the average Work levy, and changes to workplace safety incentive products • For employees, due to an increase in claims volumes and costs, a 3% increase in the Earners’ levy. More>>

Women's Affairs: Government Accepts Recommendations On Pay Equity

The Government will update the Equal Pay Act and amend the Employment Relations Act to implement recommendations of the Joint Working Group on Pay Equity. More>>

ALSO:

Immigration: Increase In Seasonal Workers For RSE

The current cap will be increased by 1,000 from 9,500 to 10,500 RSE workers for the 2016-17 season. Mr Woodhouse says the horticulture and viticulture industry is New Zealand’s fourth largest export industry, producing almost $5 billion in exports. More>>

ALSO:

Hurunui: Crown Irrigation Invests Up To $3.4m In North Canterbury

Crown Irrigation Investments will invest up to $3.4m in the Hurunui Water Project, an irrigation scheme that will be capable of irrigating up to 21,000 hectares on the south side of the Hurunui River in North Canterbury. More>>

ALSO:

Not So Great:Butterfly Eradication Success

The invasive pest great white butterfly has been eradicated from New Zealand in a world-first achievement, Primary Industries Minister Nathan Guy and Conservation Minister Maggie Barry say. More>>

Gordon Campbell: On The Government’s Tax Cuts Fixation

Long before the earthquake hit, the dodginess of the government tax cuts programnme was evident in the language of its packaging. It is being touted as a “tax cuts and family care” package... More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news