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Softwood log exports spiked to 45-month high in July

Exports of softwood logs from Australia lifted to a 45-month high in July 2024, screaming up to 265,657 m3 after the prior month saw a 36-month record of over 140,000 m3. The main recipient is India, with China re-emerging as an export destination after a nearly four-year hiatus. Source: Industry Edge The rise in exports does not necessarily signal a reintroduction of elevated levels of softwood log exports. As the data shows, the exports are evenly split between the two reported dimensions. There are prospects the recent movements are inventory clearances, including of smaller dimension logs. Australian Softwood Log Exports by Country: Jan ’17 – Jul ‘24 (m3) We have elected to show the monthly chart here, in this manner and timeframe, to underscore the differences in softwood log exports since China withdrew from the market in 2020. The second chart, which addresses the last 15 years, shows annual exports (the black line) and the moving weighted average price of those exports. In addition to modestly rising average prices since the end of 2009, the period from around 2021 shows increased price volatility. This came about as volumes deteriorated when China left the market, resulting in the massive decline in total exports. In 2023-24, total softwood log exports reached 937.0 km3, almost the same volume (just 3 km3 lower) than was the case in calendar year 2009. Annualised Softwood Log Exports & Weighted Average Price: Jan ’10 – Jul ’24 (km3 pa & AUDFob/m3) Australian softwood log export prices have fluctuated over the last year. The chart shows weighted average prices on a monthly basis (the black line), but also show the country specific prices. For most months, the price to India is hidden by the weighted average price because India has – until the re-emergence of solid trade with China – driven the price and volume. In July 2024, the weighted average export price was AUDFob126.13/m3, down 9.9% on the prior month and 5.6% lower than in July 2023. Australian Softwood Log Export Prices by Country: Aug ’23 – Jul ‘24 (AUDFob/m3) Over the year-ended July 2024, Australia’s total exports of softwood logs were 148.3% higher than the prior year, totalling 0.937 million m3. Reported exports totalled 265,657 m3 in July 2024, at a weighted average price of AUDFob126.13/m3. For export, softwood logs are differentiated as larger or smaller than 15 cm diameter. The distinction between log sizes was previously more noteworthy, but analysis becomes challenging as monthly export volumes are increasingly erratic, as seen in the chart. If the chart retains validity in current markets, it is in part to show the contrast between what was once the case and what is now occurring. Australian Softwood Log Exports by Size: Jan ’21 – Jul ‘24 (‘000 m3 and AUDFob/m3) Larger logs (diameter >15cm) dominate Australia’s exports, over most time periods. From 2021, the trend shifted away from favouring exports of the smaller diameter (<15 cm) logs. That appears to have changed over the last year, with larger dimension logs again dominating export data reports and growing strongly from some regions. Over the year ended July 2024, exports of the smaller logs totalled 0.198 million m3 or 21.1% of the total, while shipments of larger logs totalled 0.734 million m3 (78.9%). Differentiation of exports based on their diameter also allows for some price analysis. Export prices for the smaller sized logs have remained at a relatively stable price in recent months, moving through a narrow range, while the average price of the larger diameter logs has fluctuated. In July, exports of the smaller logs tallied an average AUDFob109.79/m3 while the larger diameter logs were recorded at AUDFob133.03/m3. For more information visit www.industryedge.com.au