Australia’s sawn softwood import volumes dipped in February 2019, sliding to 50,821 m3, almost 28% lower than in January and a solid 18.7% lower than in February 2018. After more than a year of solid month-on-month import growth, the last two months have seen imports back right off, as significant inventories continue to work their way through the Australian market.
While imports have ceased their stellar growth, it is highly relevant to note that at 905,915 m3 over the year-ended February, imports are just more than 40% higher than they were a year ago. As mentioned in the article above this is also likely to have impacted local produced softwood structural volumes.
Evidence that there is a controlled process of inventory management underway can be found in the pricing data for aggregated imports. As the chart below shows, the last six months has seen average monthly import prices operate in a narrow range between AUDFob482/m3 in December 2018 and AUDFob524/t in October 2018. By February, as the green-line shows, average prices had lifted again to AUDFob516/m3, despite the softer volumes.
To go straight to the dashboard and take a closer look at the data, click here.
We know there has been some concern about the potential pricing strategies of some importers as they faced down an inventory over-hang. At least as it relates to current imports, the average price has remained on the higher side of stable.
The other reminder the chart provides us is that as volumes rose to their record monthly levels in 2018, they did so on rising import prices, not lower prices, as was the experience in 2010, which is also shown in the chart.
If we examine imports of just one of the major grades of sawn softwood imports – in this case the Dressed ‘Other’ which excludes Radiata pine (therefore NZ) and weatherboards – we can see the sharp rise in imports over the last two years.
To go straight to the dashboard and take a closer look at the data, click here.
| YE Feb 18 | YE Feb 19 | % Change | |
| Austria | 17,471 | 37,945 | 117.2 |
| Russia | 6,075 | 38,092 | 527.0 |
| Germany | 2,454 | 55,443 | 2,159.3 |
| Estonia | 93,114 | 103,244 | 10.9 |
| Finland | 21,243 | 30,925 | 45.6 |
| Lithuania | 34,106 | 36,813 | 7.9 |
| Sweden | 14,017 | 44,155 | 215.0 |
| Other | 3,000 | 4,702 | 56.7 |
As the table shows, the supplier countries – from the largest contributors to the smallest – all saw their volumes increase over the year. In that context, we might sometimes expect to see new entrants, or those whose volume grew from negligible, struggle to comprehend the market price trends.
That however is not what occurred in the current market.
