Imports of sawn softwood have continued to climb sharply over 2015, reaching a new record of 725,300 m3 for the year-ended June 2015. The full year data sharpens the mind, as does the 23.7% lift in the volume of exports from 586,200m3 for the year-ended June 2014. However, the major contributor to the increase in imports is less surprising.
As can be observed in the chart below, the strength in the volume of imports continues, with imports in June amounting to 60.5 km3 or 13.9% higher than the 53.1 km3 recorded for June of the prior year. The chart starts in July of 2009 and shows that current import volumes are now at record levels, easily surpassing peaks reached in early 2011.
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As we described at the outset, there is little surprise in the driver of growth through the last year or more. Consumption of sawn softwood is fuelled by housing growth, especially free-standing houses and smaller dwelling units. Accordingly, it is no shock that it is structural timber that is dominating the growth in sales.
Dressed sawn softwood, other than that of douglas fir or radiata pine has bounded ahead in the market, growing at a colossal 107.7% for the year ended June 2015, compared with the prior year. Douglas fir and radiata pine have, however, fared nowhere near as well over the recent past. We can see this experience in the following chart.
When dressed sawn softwood imports are growing and the influence of Douglas Fir is muted in that growth, we know instantly that the North Americans are not participating over much to the increase. We can, and the data confirms this, be quite certain that supplies of imported softwood are coming primarily from Europe.
There is little surprise in this as the Australian Dollar has depreciated only modestly against the Euro, while it has slumped against the US Dollar. The simplest way to describe this is that supplies from the US and Canada have become dramatically more expensive while those from Europe have become, at best, modestly more expensive.
The chart below shows Australia’s total sawn softwood imports, on a quarterly basis, by region. The stellar rise of Europe, in blue, is impossible to overlook.
Source: ABS & IndustryEdge
Examination of the value and therefore price competitiveness of imported sawn softwood is instructive, even at the most headline level. The table below shows price movements on a comparative basis and also compared with the change in import volumes.
| % Change in Volume YE June 2015 | Total AUDFob Value YE June 2015 | % Change in Value YE June 2015 | |
|
Other Coniferous (4407.10.10.33) |
+107.7 | AUD93.4M | +129.5 |
|
Radiata (4407.10.10.25) |
+32.2 | AUD57.7M | +56.4 |
|
Douglas Fir (4407.10.10.22) |
-22.5 | AUD8.4M | -16.2 |
What is relevant to note in this table is that growing imports of sawn softwood of the other coniferous species have, on average at least, been imported at a higher price (yielding a higher import value) over the course of the most recent financial year.
Growing imports are themselves proving to be increasingly valuable, even as they gain market share over domestically produced sawn softwood products.
