Virus brings ‘new dynamic to supply and demand’ for NZ logging industry

The recovery of log export prices could be short lived on the back of competitive tensions in Asia, and as the coronavirus slows down construction in China.

Log prices had recovered some ground over the past six months to a current level for A-grade logs of about $US124 ($NZ192) per cubic metre after having dropped to as low as $US105 in July 2019.

ANZ agricultural economist Susan Kilsby said while there had not been any strong indications out of China since the virus outbreak, the market had been ‘‘quite tentatively’’ poised and was waiting to see what would happen after the Chinese New Year.

‘‘So, given this scenario, we would expect to see easing in demand in the coming weeks.’’

Forestry exporters yesterday said the sector faced some major headwinds; forest owners and contractors had ‘‘dramatically’’ curtailed production and a number of sawmills faced closure.

Current estimates suggest that log inventories in China are now above 6million cum, well above last year’s levels.

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