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Sawn softwood imports record lowest monthly level in three years

The volume of sawn softwood imports has begun to decline, with imports for December falling to 37,9000 m3, their lowest monthly volume since December 2012. Moreover, imports were 31.8% lower in December 2015 than they were in December 2014. It seems, though it may be too early to tell, that currency effects are really starting to make their presence felt.

Although trending down from its peak in July 2015, total sawn softwood imports for the year-ended December 2015 rose 11.0% for the year-ended December 2014. The tip downwards is demonstrated in the following chart, which essentially shows imports on a pathway back to more typical monthly levels. 

Fig11

To go straight to the dashboard and take a closer look at the data, click here.

While import levels may appear to be normalizing, there are competing demand drivers in the global market. 

Soft European demand sees volumes from those regions continuing to seek their best available home and Australia’s demand is strong and has been sustained. Some importers may consider their cost-competitiveness is advantaged over domestic production. At the same time, there can be little doubt that the now sustained depreciation of the Australian Dollar has played a part in pulling imports back.

In some respects, this is underscored by the almost reluctant increases in imports of some grades of sawn softwood over 2015 and even more so, by the fact that many declined.

The details are provided in the chart and the table below.

Fig12

To go straight to the dashboard and take a closer look at the data, click here.

The table includes only selected grades.

   YE Dec ‘14  YE Dec ‘15  % Change
 Sawn Dressed Radiata Pine (treated)  65,860  50,900  -22.7
 Sawn Dressed Radiata Pine (untreated)  58,869  58,717  -0.3
 Sawn Dressed Other (untreated)  168,725  258,361  53.1
Sawn Roughsawn (untreated) 141,176 147,055 4.2

It is this context that has seen domestic producers scrambling at times, facing increased competition on a volume basis, for the major grade of sawn softwood, at the same time as the Australian Dollar depreciated sharply. Under normal conditions, imports would have been expected to decline throughout 2014 and 2015.

That they did not, had many turning to analyse the value and price of imports. In total, the value of imports declined by 9.4% year-ended December 2015, compared with the prior year. This compares with the 11.0% increase in import volumes for the year and demonstrates that the average price of imports of sawn softwood fell in 2015, despite the depreciation of the Australian Dollar.

However, in total, European dressed sawn softwood that experienced a 53.1% increase in imports as described above, achieved a 56.5% increase in total value, meaning the average price rose marginally, in Australian Dollar terms. In Euro terms, the price of that timber was lower than the year before, with producers and/or imports bearing the cost of competing in the Australian market.

Posted Date: March 4, 2016

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