Local sales see softwood above 3.0 million m3*

Local sales of sawn softwood products remained above 3 million m3 year-ended October for the third successive month, recording the ninth successive month of increases. Sales for the year totalled 3.075 million m3, as strong demand places the pressure under unexpected demand-side pressures.

The chart shows annualised sales over the last five years and what is most remarkable about it, is the relatively fast shift from a modest upswing to a full blown peak in total sales. Because this displays annualised sales, normally, the curve up (less so down) would be relatively gradual. Not so in this most recent spike.

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Although still some way off the top of its performance, local sales of sawn softwood continue to be strong, with producers working to ensure they are able to meet demand.

The table below sets out the sales experience, by grade for the year-ended October 2020, compared with the year-ending October 2019.

While on an annualised basis, structural sales dominate – see the pie chart below – there are other grades that have been growing significantly faster. From relatively small bases, growth in Fencing products (+29.0%) and Poles (+26.3%) tell a story of the shape of demand in the domestic economy.

But among the three major grades, it is the (currently) third place holder – Packaging – that recorded the strongest sales growth. Sales lifted 10.5% over the year-ended October, totalling almost 639,000 m3 annually. The result is just behind the Treated Structural <120mm grade, the growth rate for which is about one-third of the Packaging grades.

As the pie chart shows, sales of structural grades – shown in the darker and lighter blues – account for about 48% of total sawn softwood sales domestically. There may be some room for that proportion to increase to meet changes in the demand profile from the spike in housing activity, but just for now, it is not clear that will happen.

*Please note that discussions of the softwood sales data in previous months has been affected by a data computational error which has seen an overstatement of total sales volume for lower grade products. Specifically, the following correction has been made to the packaging data.