Sales of domestically produced sawn softwood products continue to hug their peak, totalling 3.169 million m3 for the year-ended October 2018, up 1.0% on a year earlier. Sales in October totalled 280,291 m3, up 3.3% on October 2017 and 8.6% higher than in September.
As the chart below shows, sales of domestically produced sawn softwood products are at their absolute peaks. On a monthly basis, it was just three months back, in August 2018, that sales topped the 300,000 m3 mark for the first time. Although the subsequent month saw a related drop-off, sales in October were clearly back to trend.
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Inevitably, the significant grades continue to dominate. These are primarily the structural sawnwood products, both the treated and untreated grades.
The chart below shows the last five years of year-end October sales. It accentuates the growth in total reported sales, from 2.741 million m3 year-ended October 2014, to the 15.6% higher 3.169 million m3 year-ended October 2018.
Also complementing this local product is imported softwood sawntimber. The latest trade data shows, Australia’s imports of sawn softwood products totalled 892,793 m3 over the year-ended October 2018. This is analysed in more detail elsewhere in Statistics Count.
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Perhaps the most significant aspect of the sales data is how the patterns of sales have changed over the period. The largest mover – shown in mauve, in the middle of the chart – has been Treated Structural <120 mm, which has clearly taken up volume that would otherwise have been taken up by its untreated cousin, Structural <120 mm.
It has been some time since Statistics Count examined these two grades that accounted for 46.6% of all locally produced sawn softwood sales over the last year (1.478 million m3). The chart below shows the two grades on a stand-alone and year-end sales basis for the last three years.
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The chart seeks to demonstrate that sales of these very similar products have entered a period in which their pattern appears to have altered, or perhaps, is altering.
It was not until early 2017 that sales of the untreated grade began to actually decline. Since the start of 2017, sales of untreated Structural <120 mm have fallen a relatively modest 2.7%. Year-ended October 2018, sales totalled 739,974 m3.
Meanwhile, sales of the Treated Structural <120 mm grade have expanded 6.8% over the same period, in an aggregate market that has now turned down marginally. Year-ended October sales totalled 738,568 m3.
This is what drew our attention – for the year-ended October, the two similar products are selling almost exactly the same volume on an annualized basis, and appear to be swapping volume leadership between them on a regular basis.
The strength of the housing market obviously drives the sale of sawn softwood products, especially the structural grades. However, that is less the case for the Packaging grades that are represented in the chart below. This data is worth examining because over the last four years, growth in sales was initially strong, then stable and recently, stellar – at least for one month.
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In part, we can consider the packaging grade’s growth to have something to do with the state of the manufacturing sector in Australia. So the rise to the end of 2015, that saw sales top out at around 525,000 m3 per annum was positive for the Australian economy overall.
The subsequent downturn in sales does not mean manufacturing declined however. Improved sawmill efficiencies and recoveries are likely to have diverted product from packaging and into structural timber production and sales.
However, growth began to return to Packaging grades in early 2018, and of course, by June 2018, a record monthly sales volume of 74,966 m3, fed into annualized sales that are reportedly at record levels, reaching a very significant 562,149 m3 for the year-ended October 2018.
The devil may be in the detail here. What packaging exactly is being supplied now may be of interest. Perhaps the most interesting element of this is that grades like packaging are growing, just as the housing centric grades start to decline.
