Despite lower production capacity since the final quarter of 2017, Australia’s sawn softwood producers continue to produce and sell at the high end of the range. Sales totalled a strong 279,224 m3 in May, up 16.3% on April, but 4.3% lower than in May 2017. Underscoring the strength of domestic sales over a somewhat challenging production year, sales for the year-ended May were 0.4% higher than for the prior corresponding period.
The chart below shows aggregate sales on a monthly and annual basis for the last five years.
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While the chart clearly shows the ramp up in sales over the last four years, it is also displaying evidence that sales have flattened out in the last two years as production constrained by resource limitations peaked. There should be little doubt that this ‘peaking’ has contributed to the significant rise in imports of sawn softwood over the last year or more, though it is not the major factor.
Sales details have, however, not been symmetrical over the period. Aggregate growth has been met with quite different growth experiences for the specific sales grades, as the chart below shows.
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Structural grades have exhibited the strongest sales growth over the last year. The untreated Structural <120 mm grade has long been in decline, as it has been substituted for the treated equivalent. However, despite that competitive pressure, sales grew 2.3% over the last year, to reach 760,460 m3. The larger sizes (>120 mm) saw sales increase a very strong 38% to 70,069 m3.
Over the same period, sales of the Treated Structural <120 mm grade also grew, by 7.2% to 744,757 m3. This grade remains close to becoming the largest distinct sales grade, but its growth has been slowed in recent times.
What the sawn softwood sales data demonstrates is that although sales are near peaking, producers are emphasizing structural grades over other products. So too, as the import data shows, are the importers.
