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Sawn softwood imports show continued improvement since January

Imports of sawn softwood in May, continued to show improvement in volumes since the start of the year, with prices appearing relatively stable. Year-ending May 2024 imports were 555,899 m3 down just 7.3% on the previous year, but significantly below their peak of just under 1.0 million m3.

The import numbers alone do not tell the full story of course, because inventory movements and levels are an important and continuing element of managing total stock. Anecdotally, it seems inventory overhangs have also been worked through the domestic economy over the last year. Importantly therefore, annualised import volumes do not necessarily reflect annual sales of imported material.

Meantime, as the chart here shows, monthly imports have stabilised, reaching 52,294 m3 in May, up 19.9% over April (43,600 m3) and up 11.9% when compared to May 2023 (46,723 m3). It is important to note that imports arriving in May began their journey from Scandinavia and the Eurozone (mainly) around February and most were ordered in the latter part of 2023. The predictive powers required for balancing import supply and inventories are substantial.

Examining the recent ‘May’ experience, it can be observed that May 2024 was relatively normal, at least compared with May 2022, when import supply was peaking. It is most pertinent to look back to the pre-pandemic May 2019, when monthly imports were just below (50,849 m3) May 2024 (52,294 m3). It is not irrelevant to note that in mid-2019, the Australian economy was considered to be slowing so quickly, it was potentially heading for a recession.

As can be seen in the following table, when it comes to imports, the heavy lifting is still being carried by four main products or import codes.

Interestingly it was only two of the major products contributing to the increase in volume in May.

And where did the increased monthly volume come from?

In May 2024, the top five countries of origin were New Zealand (114,519 m3), Lithuania (89,280 m3), Germany (84,525 m3), Sweden (52,109 m3) and the Czech Republic (43,828 m3).

Although the volumes from those main importing countries are distributed over a number of imports products, not surprisingly, their impact on the four main import products is significant.

In May 2024, there were also several ‘outlier’ products, which saw significant year-ending increases, albeit of a low base.

Volumes of 4407.11.99.13 (Roughsawn radiata pine) has seen a steady increase since mid-2022, with prices generally holding up in recent months. The major suppliers are New Zealand, supported by Brazil.

The other ‘outlier’ product which has experienced significant growth in the past twelve months is 4407.12.99.19 (Roughsawn fir or spruce – not for making staves, 120-450 cm2) which was up 449.7%. This product remains a mystery to some extent because its end-uses are particularly obtuse.

In this case the major supply countries are Lithuania and Germany.

Imports appear to be settling into a more familiar and stable pattern, with the likelihood that inventory balances have also improved.

Posted Date: July 2, 2024

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