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Sawn softwood import explosion saves FY22

The role of imports of sawn softwood has never been clearer than in 2021-22, Imports rose a massive 64.8% to a record 923,471 m3, helping to meet the surge in demand for sawnwood. The level of imports is one remarkable factor, but the speed at which the increase came – and the price – are the truly remarkable factors.

The headline data can be seen in the chart below, showing the rapid rise in imports and the even faster rise in prices, with average prices peaking late 2021 and returning to near record levels at AUDFob808/m3 in June 2022.

In the face of runaway demand, the supply response from importers has been overwhelmingly positive, with only two of the raft of major supplier nations experiencing any wind back of shipments. Shown below, the decline from New Zealand is understandable in the face of their own boomtime, and the reduction in Russian supply is easily explained as a consequence of Russia’s war on Ukraine.

After a year or more where Australia played secondary market status to the explosive US market, the settling of the US housing market has freed up volume and provided the opportunity for the Australian supply to be supported even more significantly by importers.

Shipments from Germany rose almost 150% to dominate the market (22.1% of total volume) with Sweden doubling its contribution (14.4% of total volume). Lithuania tripled its shipments to account for 12.3% of the market, New Zealand supplied 11.0% and Estonia 10.4%. The top five suppliers – ably supported by others – delivered 70.2% of total imports in the last financial year.

By port of destination, as the chart below shows, imports to all Capital Cities in Australia rose, with the exception being the small volumes shipped to Port Kembla.

At least on an ‘import codes’ basis, we can also discern a ‘top 5’ which between them accounted for 74% of total imports. All are structural grades., with the charts and tables below providing the basic information for each grade.

The last year, all these ‘grades’ have been a little bit special for the Australian economy and the housing supply chain. Without them, what would have happened?

But there is one grade in particular worth a mention. Take a look at the chart and tables for the Roughsawn non-Radiata, >120cm2 – <450cm2 (4407.11.99.15). The almost four-fold increase in imports occurred just in the second half of the fiscal year and came with limited price increases. Remarkable! (and ignore the price spike in 2019 which arose for a tiny volume).

Posted Date: October 27, 2022

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