Softwood log exports in the spotlight

Inevitably, as the fire season continues and seemingly unprecedented damage has been wrought upon the national productive plantation estate, the role of log exports – especially softwood logs – has been under close consideration. Year-ended November 2019, Australia’s softwood log exports totalled 4.411 million m3, up 3.6% on a year earlier. Of this volume, in total, 3.765 million m3 was softwood logs of different species, dimensions and types.

In truth, softwood log exports have long been contentious, with different claims about the driver for and role of exports. Statistics Count does not and cannot do more than present the facts of those exports.

The first chart shows all of Australia’s log exports over the last decade.

That said, there is no doubt that from 0.971 million m3 year-ended November 2009, to the peak of 4.511 million m3 year-ended November 2017, the increase in log exports was very significant. Equally, it is clear that the significant majority of those exports was softwood logs.

Fig 11

To go straight to the dashboard and take a closer look at the data, click here.

It is very noticeable that from the start of 2017, more refined log grading was introduced to the export definitions. This has allowed, inevitably, more refined assessment of the grades and types of logs being exported, especially of softwood logs.

The table below sets out the export volumes for each of the last two years, displaying the individual grades and their species groupings.

This more refined log export data is useful in part because it distinguishes softwood (coniferous) log exports by species and also by size. Ignoring the specifics of species for a moment, it can be observed that softwood log exports are divided between those that are <15cm diameter (at the small-end or SED) and those that are >15cm diameter (at the small-end or SED).

Logs that are <15cm are very unlikely to be sawable or indeed peelable in Australia. They might be considered suitable for poles in some instances, but not in all cases. Tally the pine and non-pine and we can see that exports of these smaller diameter logs totalled 1.205 million m3 year-ended November, up 82.7% on the prior year. These logs may result from thinning and estate right sizing activities.

As the chart and table below demonstrate, export volumes vary widely from month to month for the smaller dimensions and since they were introduced, the price has fluctuated quite widely. In November 2019, the average export price was AUDFob121.87/m3. That price suggests that in the main export destination (China), these logs are more valuable than as just pulpwood.

Fig 12

To go straight to the dashboard and take a closer look at the data, click here.

By contrast, the logs that are >15cm are more likely to be sawable because they include all logs >15cm. Unfortunately, we know that in the vast majority of cases, logs <22cm can be sawn in Australia, but are not all economically suitable. The consequence being that an unknown proportion of these logs is genuinely a sawlog in the Australian context and an equally unknown proportion is very unlikely to be sawn in Australia.

The difference is that where in most of Australia, logs from 15cm to <22cm are not easily processed, in main international markets they can be target size logs for peeling to veneer to manufacture plywood. In recent months, these logs have been observably more stable as to price, averaging AUDFob133.82/m3 in November 2019.

Fig 13

To go straight to the dashboard and take a closer look at the data, click here.

The lack of clarity and more refined ‘banding’ of the exports by dimension goes some way to reducing the contention around softwood log exports. This is especially the case because although they were down 12.2% year-ended November, total exports of softwood logs >15cm diameter totalled a very significant 2.550 million m3. With sawlog shortages predictable in coming months and certainly years, large export volumes will be under constant discussion.

What this data also does not tell us is where the logs are exported from, and even that level of detail does not tell us where the logs originated. How far were they from processing options? How suitable are they for the local processors, assuming there are any? These are questions to which the trade data provides some clues, but not sufficient to dampen down all of the debate.

The inevitable discussion about softwood log exports will be important in coming months. In the future, we can expect softwood log export data to be even more refined as to dimension, if nothing else. That would help the entire industry determine the path forward on softwood log supply.