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March 14, 2019

Chinese importers in search for lower-quality, cheaper logs

Chinese importers in search for lower-quality, cheaper logs

Total softwood log stocks increased across China during the Lunar New Year holiday period to just over 4.1 million m3. Daily uplift from the ports has steadily increased since this holiday period with current estimates between 60-70,000 m3 per day. The rate of offtake over the next month will likely determine the market direction for the next three to six months. Over 2018 the total softwood log market remained balanced with the number of days inventory supply in the 40-50 range. Log exporters expect a similar balanced position to be sustained through 2019.

The China log market is currently sitting at a sensitive point. Based on current CFR log prices and the China retail prices the log buyers cannot make a profit from New Zealand radiata logs. This does make Chinese log buyers quite discerning in log quality to ensure they are getting the quality of the grade they purchase.

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