Progress on export log sales?

Progress on export log sales?

Over the past 18 months we have all become data experts. As we look to emerge from lock down in some locations the regular update of daily COVID 19 case numbers and vaccination rates are of great importance as we try and ‘bend the curve’ and re-open.

While nowhere near as important this month’s trade data shows some interesting developments which in epidemiological terms is displaying a Reff (effective reproduction rate) with the same ups and downs as our COVID 19 experience.

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As can be seen in the graph, trade disruption resulted in the export trade with China declining from October 2020 through to January 2021. Over this period, sales to China declined from some 300-400,000m3 per month to zero. Since that time exporters have developed markets in India, Korea and Vietnam.

Its still unclear if these countries will be a long term destination for softwood logs but certainly the results since January have been averaging just under 120,000m3 per month. Shipments in July were above average while sales in August of 93,689m3 were down compared to the average for the period.

In latest information, IndustryEdge is reporting to its Wood Market Edge subscribers that exports for July were revised down by the ABS to 150,031 m3 and for August crashed back to a reported 93,644 m3. This data is shown in the charts.

Noting the changes by the ABS, the latest log export data is presented in the table below.

 

4403.2 Coniferous Log exports

Cubic Metres

2021M02

2021M03

2021M04

2021M05

2021M06

2021M07

2021M08

India

     41,901

    91,818

  103,195

    85,310

    14,101

    18,915

    36,091

Korea

     15,086

    74,578

    16,325

    27,445

    49,795

    99,457

    37,486

Vietnam

     10,864

       9,449

       7,081

    17,616

    26,144

    31,120

    19,246

Other

        1,371

       1,338

          702

    14,861

       1,655

          539

          866

Total

     69,222

  177,182

  127,302

  145,231

    91,695

  150,031

    93,689

 

It has also been interesting to note the major ports of loading.

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Since January Portland, Melbourne and Twofold Bay (Eden) continue to be the major ports for shipments. Of these three ports the Melbourne trade is based on containers and as well as the market issues is also impacted by the freight logistics affecting container shipments.

So, while we would not offer to calculate the Reff for these export shipments, it is clear exporters continue to develop alternative markets, but just as clear they are challenging to say the least.

Industry participants have reported that access to containers and reliable shipping have recently had a big impact on exports from the Port of Melbourne, and again, IndustryEdge is reporting that was the case in August. General shipping and freight availability is one consideration, but the huge spikes in shipping costs are all the more significant.

There is little room for speculation about where the logs might be sold when the cost of shipping is growing so rapidly and can in some cases remove all the available margin.

So, overall, it is difficult to escape the fact that softwood log exports were down 32.7% year-ended July 2021, crashing to 2.364 million m3 for the year. This is more than evident in the chart below, which also indicates the decline in the weighted average export price since mid-2018.

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To go straight to the dashboard and take a closer look at the data, click here.

 

Our acknowledgment

In the spirit of reconciliation, Forest & Wood Products Australia acknowledges the Traditional Custodians of Country throughout Australia, and we acknowledge their connection to the land and their custodianship of Country and forests. We pay our respect to Elders past and present and extend that respect to all Aboriginal and Torres Strait Islander peoples.

Our acknowledgment