Sawn softwood sales remain at peak

Sawn softwood sales remain at peak

Australia’s sales of domestically produced sawn softwood totalled 3.137 million m3 for the year-ended October 2017, just 1.1% higher than a year earlier. Since October 2016, year-end volumes have remained above 3.100 million m3, but have at no time reached 3.200 million m3, despite the month-to-month fluctuations.

The chart below shows that monthly sales volumes have been more than typically variable over the last year. In October, sales were reported to total 271,255 m3, down 1.4% on the prior month, but 0.9% higher than in October 2016.

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Against this backdrop of solid sales that appear to be at their peak, it is the variations within grades that provide the most interest.

Statistics Count has regularly commented on the ‘race’ for market leadership between the traditional untreated Structural <120 mm grades and their more recently arrived Treated Structural <120 mm cousin. The latter remains the fast-moving volume grade of sawn softwood sales in Australia, having grown 8.1% over the year-ended October, totalling 725,085 m3 for the year. With the untreated cousin having grown a little more than 1.4% over the same period, totalling 759,157 m3 for the year, we can project that before the middle of 2018, the treated version will have surpassed the untreated.

However, the situation is – somewhat strangely – the opposite for the larger sizes of the Structural Softwood grades. The untreated Structural >120 mm grade has seen sales, albeit from a somewhat low base, rise 10.3% over the year, totalling 63,346 m3 for the year-ended October. Sales of the Treated Structural >120 mm grade declined 15.6% to 65,904 m3 over the same period.

On first blush it is difficult to determine why this sales difference has arisen between the two grades and sizes. There is perhaps any one of the different impact of imports on the market, varied demand for the products and the economics of producing larger members compared with the return available for them that could impact the sales experience in such a marked manner.

Regardless, as the chart below shows, the combined significance of the Structural grades is utterly dominant, accounting for just more than 50.0% of total sales for the year-ended October. This 1.552 million m3 of sales dwarves second-placed sales of Packaging grades which totalled 0.513 million m3 over the same period.

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We can look to Structural softwood as the single major product of the Australian domestic wood products sector, both now and into the future – no matter how we might carve up the market between the treated and untreated and the large and small dimensions.