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Sawn softwood imports up 48.4% in 2022

The following trade update has been supplied by IndustryEdge from its online platform, Wood Market Edge online. All the data used and referred to here is available for download by IndustryEdge subscribers and is part of the most timely and comprehensive data and information service available in Australia.

Learn more about Wood Market Edge online here.

In 2022, Australia’s sawn softwood imports lifted to 989,129m3, an increase of 48.4% over 2021. This was slightly down from the year-end peak, which was reached in November and was associated with an easing of prices which for all products averaged AUDFob732/m3 a sharp decline of 15.5%.

As the chart shows, annual imports have begun to soften, with further decline expected over coming months, based on recent monthly import volumes.

Despite the modest softening, December saw imports reach 67,428m3, the second highest December month since December 2017. Reading the data in the chart below to the likely position by mid-2023, we can expect imports to still be north of 900,000 m3 on an annualised basis. In many respects, this is a reflection of the huge pipeline of building work that continues to drive consumption and prices.

There can easily be significant changes between ‘grades’ as they are reflected in import codes, over relatively short periods of time. Small changes in product can lead to a change in the import codes. Rarely however do we see such significant changes as those for Treated Structural products.

In this chart we can see imports totalling 190,276 m3 in 2022, up an incredible 366% on the year prior. The weighted average price is clearly in retreat, with the December price at AUDFob769/m3.

This is one of the grades where there is supply from Europe and South America, as well as from New Zealand, as the chart below shows. Until the most recent year, with the exception of the odd shipment, supply of this grade was entirely in the hands of New Zealand, supplemented by Chile.

Estonia, Finland, Germany, Lithuania and Sweden have all joined the market in the last year! New Zealand, for all of that, remains the stable influence and the major contributor. Its 49,372 m3 was the market leading volume, up a very strong 37.3% on the prior year.

Melbourne receives the majority of shipments (85,351 m3 or 45% of the total), with Sydney (32,083 m3), Brisbane (31,995 m3) and Fremantle (31,810 m3) all very similar and receiving about 17% each of the total. IndustryEdge subscribers seeking to do more forensic analysis can follow trade flows from port of origin to port of delivery.

If we are to identify one other grade that has shot to prominence it would be the larger dimension, roughsawn, non-Radiata. At 107,210 m3 in 2022, imports lifted an eye-watering 5,631%! In reality, it is probably better to say that the import code is now in use, where it really had not been previously.

The major increase in supply came from the Czech Republic and Poland (interestingly, these are the countries where supply volumes dropped for one of the smaller dimension grades. We surmise this may then reflect a change in specification from narrow (<120cm) to wider (>120 cm) material.

What makes this more interesting is consideration around the likely application of this supply. We do not speculate publicly on these matters, but it is a worthy question to ponder.

Overall, the main countries of origin continue to be Northern European, with Germany  (229,586m3), Lithuania (142,147m3), Sweden (112,023m3), Estonia (97,026m3) and Czech Republic (64,384m3) all playing a major role. They continue to be ably supported by New Zealand (109,470 m3) and Canada (38,364m3).

Posted Date: February 26, 2023

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