New Zealand Log Prices - September 2010

A clearing of inventory in China has prompted a firming of CFR (in-market) log prices this month. The seasonal slowdown of Russian supplies, coinciding with a particularly fierce monsoon in the timber producing region of south-western China, have helped to reduce stocks in this market reports Agri-Fax.The CFR price for a KS log into China and South Korea has firmed US$5/JASm3 this month to be back above US$120/JASm3. Meanwhile a KI log has also lifted US$4/JASm3 to be at US$114/JASm3.

Demand in China has maintained momentum through the northern hemisphere summer, which has assisted to rapidly soak up the seasonal peaks in volume entering this market. There has been continued strong activity from the Indian market, and this is forecast to continue. Meanwhile the mature markets of Japan and South Korea are showing reasonable demand and activity.

Overall Log Index and Summary
The Combined Agrifax Log Price Index which measures returns from the whole forest has firmed slightly this month to be at NZ$82/T. In the North Island, the Pruned index has recovered back to its July level. Meanwhile, the South Island Unpruned index has also strengthened. Strong export demand appears to have returned upwards pressure to the Combined Index and is expected to continue through to the end of 2010.

Log price changes:
North Island