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Sawn softwood sales continue to deteriorate | Quarterly prices moderating

Sales of locally produced sawn softwood products slipped back to 245,674 m3 in September 2023, slipping 5.1% from the prior month to contribute to annualised sales that dipped to 2.808 million m3 year-ended September. Meantime, September quarter weighted average pricing was generally lower, but with several outliers.

As the chart below shows, annualised sawn softwood sales have tracked lower for more than two years, since peaking in mid-2021. Total sales are at risk of falling below the 2.8 million m3 mark in coming months. However, just as relevant, monthly sales appear to have stabilised around the 245,000 m3 per month mark, which may begin to flow through to slightly higher annual results in coming months. In short, a volume plateau may be on our doorstep.

As the FWPA Data Dashboard demonstrates, there are no grades providing sanctuary from declining sales over the last year, except for the ‘fall back’ option of Export. Declines have been as steep as 25.36% for Appearance grades and as small as 2.40% for Packaging timber.

Prices for locally produced sawn softwood products have – for the most part – been more stable over the last year than the volume of sales.

Focussing first on the two major structural grades – Untreated <120mm and Treated <120mm there are observable differences.

Over the year-ended September, the weighted average price of Structural Untreated <120mm was down -4.1% to a reported $725.51/m3 (first chart), while the Structural Treated <120mm was stable at 0.0% to a reported $853.96/m3 (second chart).

Across the board, the Treated and Untreated >120mm grades experienced price declines over the year-ended September.

One notable characteristic of the recent trade is that some states buck the trends over the quarter, suggesting there may be something structurally different from one State market to the next.

There may be limits to the rhyme and reason for this however, with one difference being structural grades <120mm which sold for more in Victoria than NSW in the September quarter, this compares with previous quarters where the opposite was the case.

Likewise, the prices for Packaging timber have begun to moderate. So much so that in the September quarter, the weighted average price of Dry Packaging was $370.16/m3, very similar to the Green Packaging weighted average price of $364.87/m3. Both were lower for the quarter, but the Dry Packaging price fell a sound 9.8% compared to the prior quarter, while the Green Packaging was a more modest 2.5% lower.

There are price disturbances everywhere in the system right now. Though the trend has been toward lower prices, it is not entirely uniform and isn’t always explaining itself neatly.

Posted Date: November 8, 2023

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