Sawn softwood imports peak

Sawn softwood imports peak

Imports of sawn softwood appear to have peaked and may be trending down under the pressure of a depreciated Australian Dollar and the competitiveness of domestic processors. For the year-ended March 2016, imports totaled 654,010 m3, down 5.4% from a year earlier. However, most significantly, in March 2016, imports totaled 51,172 m3, down 24.1% on March in 2015.

As the chart below shows, the sawn softwood import trendline has been decidedly down for six months, and there is little end in sight, with the biggest monthly imports on record due to ‘drop out’ of the year-end data over coming months.

fig4

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Of all of the main grades of sawn softwood, only a small number saw import volumes rise over the last year. Among those grades that did see import growth, most managed to move significantly as the table below shows.

Grade YE Mar ’16 Imports (m3) % Change on Prior Year
Coniferous Dressed: Douglas Fir (4407.10.10.22) 35,833 +32.5
Coniferous Dressed: Other (4407.10.10.33) 228,392 +1.5
Roughsawn <120cm2: Western Red Cedar (4407.10.91.03) 19,823 +18.0
Roughsawn >120cm2: Western Red Cedar (4407.10.91.04) 7,611 +27.7

 

This is also reflected in the chart below.

fig5

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The total sawn softwood import picture is similar on a value basis, although the value of monthly imports has increased in the first quarter of 2016, even as the volume has declined over the same period.

In March 2016, the total import value rose 6.5% on the prior month, while the volume declined 1.9% over the same period. Ordinarily, this could be explained by movements in the grade of sawn softwood being imported. The implication would be that more valuable sawnwood had been imported compared with the prior month, causing the total import value to rise. There is some evidence of this occurring between the two recent months, but values were up moderately, almost across the board as the Australian Dollar became more expensive over the month.

Of the grades, the largest volume of imports is for dressed sawn softwood of species other than Douglas Fir or Radiata Pine. As the chart below demonstrates, the rise in imports from mid-2014 was sharp and strong, but by the end of 2015, had commenced what is now a decided slide.

fig6

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Trend expectations must be that dressed sawn softwood imports are easing to perhaps a new equilibrium level.

For the year-ended March 2016, imports may be up 1.5%, but they will decline progressively as the remaining ‘large’ import months fall out of the year-end data. 

Of the countries providing supply, the big upwards movers have been Estonia (up 34.7% to 66,821 m3) and Sweden (up 93.1% to 63,916 m3), while those experiencing the largest declines were Austria (down 49.6% to 28,297 m3) and Finland (down 36.3% to 24,671 m3).