Jump to Navigation

North America supply a risk to NZ

External Reference/Copyright
Issue date: 
June 24th, 2011
Publisher Name: 
International Forest Industries
Publisher-Link: 
http://www.internationalforestindustries.com
More like this
Timber Procurement

-----------------

Available capacity and a favourable exchange rate has allowed North American exporters to compete strongly for market share in China. In the four months to April 2011, North America increased its market share to 18% from 7% a year ago. New Zealand’s market share increased from 25% to 28%. The Russian share of Chinese log imports over the same period plunged from 62% to 47%. This is despite increasing overall supply by 1%.

Production in North America normally peaks in the May to October period so supplies from this region will be an important factor driving CFR prices in the coming months. Log prices in the US are showing signs of easing. A weak construction market has dampened demand for logs from American sawmills. Therefore log exports from Washington and Oregon are expected to produce another record year.

Prices in Asia are forecast to remain above 2010 levels in spite of an anticipated correction as happened in 2010. Chinese inflation was recorded at an annual 5.5% for the month of May. This will encourage more logs to be exported from the US in 2011. Whether China and other Asian markets can absorb this increased supply remains to be seen. But further increases will pose a risk to log prices in Asia.

Source: NZX Agrifax at www.nzxagri.com/agrifax

---------------



Extpub | by Dr. Radut