Australia’s imports of sawn softwood lifted to 917,505 m3 over the year-ended January 2019, rising 48.2% on the prior year. Although there is decided evidence of a downturn in demand and imports, the record levels of annual imports have been stable over the last few months. On a monthly basis, imports in January 2019 totalled 70,274 m3, down just 1.5% on January 2018. Imports are more stable than the market situation might suggest.
The decadal chart below shows that roughly every three years, imports have grown to a new peak, before plateauing and subsequently declining. The current record cycle is observably a little different to the two previous peaks – imports grew faster and in the last three months (November 2018 to January 2019) have, on an annualised basis, been very stable.’
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Industry participants have also pointed to another difference in this latest peak. The growth in imports was largely orderly and rational, filling a supply gap and need. That does not mean, especially in mid 2018, that imports were not impacted by some more opportunistic behaviours, but it does appear that an overhang in total supply in late 2018 is being managed in a more orderly manner than has traditionally been the case. For instance, there do not appear to have been any substantial discounting to clear inventories, or additional and wide-scale spikes in imports.
The chart below shows annual imports of sawn softwood for the year-ended January, by grade for the last five years. To accentuate the main products, the smaller volume grades are displayed in grey. It should be noted that since January 2017 there are new import codes in operation that have split the main dressed sawn softwood import grade into two: 4407.11.10.40 ~ Radiata (shown in bright blue) and 4407.12.10.13 ~ Fir or Spruce (shown in mustard-yellow).
To go straight to the dashboard and take a closer look at the data, click here.
The first and unavoidable point to note is that imports grew very strongly, as described earlier, over the year-ended January 2019. But the really large increase of note is in imports of the dressed Radiata product, shown in blue.
Over the year, imports grew a massive 101.2% to a whopping 353,964 m3, supplemented by its non-Radiata cousin, which saw imports rise 76.4% to 155,321 m3. Combined, imports of these two grades of essentially similar products totalled 509,285 m3, a rise of 92.9% on the prior year and accounting for 55.7% of total sawn softwood imports.
That massive lift in imports underscores the shortfall in dressed structural timber in Australia, and is further supplemented by their Roughsawn cousin – 4407.11.99.04 – imports of which grew a solid but somewhat unremarkable 12.6% to 149,479 m3.
