Progress On Export Log Sales?

Over the past 18 months we have all become data experts. As we look to emerge from lock down in some locations the regular update of daily COVID 19 case numbers and vaccination rates are of great importance as we try and ‘bend the curve’ and re-open.

While nowhere near as important this month’s trade data shows some interesting developments which in epidemiological terms is displaying a Reff (effective reproduction rate) with the same ups and downs as our COVID 19 experience.

As can be seen in the graph, trade disruption resulted in the export trade with China declining from October 2020 through to January 2021. Over this period, sales to China declined from some 300-400,000m3 per month to zero. Since that time exporters have developed markets in India, Korea and Vietnam.

Its still unclear if these countries will be a long term destination for softwood logs but certainly the results since January have been averaging just under 120,000m3 per month. Shipments in July were above average while sales in August of 93,689m3 were down compared to the average for the period.

In latest information, IndustryEdge is reporting to its Wood Market Edge subscribers that exports for July were revised down by the ABS to 150,031 m3 and for August crashed back to a reported 93,644 m3. This data is shown in the charts.

Noting the changes by the ABS, the latest log export data is presented in the table below.

4403.2 Coniferous Log exports

Cubic Metres	2021M02	2021M03	2021M04	2021M05	2021M06	2021M07	2021M08
India	41,901	91,818	103,195	85,310	14,101	18,915	36,091
Korea	15,086	74,578	16,325	27,445	49,795	99,457	37,486
Vietnam	10,864	9,449	7,081	17,616	26,144	31,120	19,246
Other	1,371	1,338	702	14,861	1,655	539	866
Total	69,222	177,182	127,302	145,231	91,695	150,031	93,689

It has also been interesting to note the major ports of loading.

Since January Portland, Melbourne and Twofold Bay (Eden) continue to be the major ports for shipments. Of these three ports the Melbourne trade is based on containers and as well as the market issues is also impacted by the freight logistics affecting container shipments.

So, while we would not offer to calculate the Reff for these export shipments, it is clear exporters continue to develop alternative markets, but just as clear they are challenging to say the least.

Industry participants have reported that access to containers and reliable shipping have recently had a big impact on exports from the Port of Melbourne, and again, IndustryEdge is reporting that was the case in August. General shipping and freight availability is one consideration, but the huge spikes in shipping costs are all the more significant.

There is little room for speculation about where the logs might be sold when the cost of shipping is growing so rapidly and can in some cases remove all the available margin.

So, overall, it is difficult to escape the fact that softwood log exports were down 32.7% year-ended July 2021, crashing to 2.364 million m3 for the year. This is more than evident in the chart below, which also indicates the decline in the weighted average export price since mid-2018.