The following trade update has been supplied by IndustryEdge from its online platform, Wood Market Edge online. All the data used and referred to here is available for download by IndustryEdge subscribers and is part of the most timely and comprehensive data and information service available in Australia.
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Although moderating, imports of sawn softwood continue to make a huge contribution to total supply, with total imports at 936,359 m3, up a huge 65% on the prior year. While volumes are moderating, the same cannot really be said of prices, which are off their peak, but averaging AUDFob760/m3 in July down 5.8% on the prior month.
As the chart here demonstrates, imports have probably peaked in this cycle, just as is the case for local supply. At 69,461 m3 in July, imports were at their lowest monthly total since the seasonal lull in January. Despite the softening, there is some evidence import prices are at a new bench, with little reason for them to decline in the current market.
As has been the case for some time, all the heavy lifting is done by five import grades/codes:
- 4407.11.10.34
- 4407.11.10.39
- 4407.11.99.08
- 4407.11.99.15
- 4407.12.10.16
The real powerhouse of these grades has been 4407.12.10.16 – Dressed Fir or Spruce. Year-ended July, imports lifted 95% to 375,240 m3, as we can see below.
The table shows three countries delivered the huge volume uplift: Estonia, Sweden and Germany. Given the Russian war on Ukraine and the correlated energy and logistics challenges, we can only imagine the impact on import supplies over the next year from Europe. We can be confident suppliers will do all they can to deliver, but the laws of unintended consequences are compounded right now.
Compared with prior July imports, in the last five years, only July 2018 saw imports higher than in July 2022. Imports of 69,461 m3 in July 2022 were 22.9% higher than for the same month in 2021.
For all that distance is a factor, relative security, stable government, sound markets and an ability to pay the required price continue to make Australia a valuable market for global supply.
