Softwood sales dip as supply and capacity pressures mount

Sales of locally produced sawn softwood products dipped in October, falling 26.1% compared with the prior month. At 206,847 m3, sales were toward the very bottom of their long-term monthly range. The latest result saw the year-end volume fall 6.2%, (around 192,000 m3 lower than for the year prior), to 2.904 million m3.

At one level this is a hard to fathom result – sawmills are producing literally every metre of finished timber they can. In normal conditions, that would flow through to persistent production peaks. However, availability of logs for processing in local sawmills has been impacted by the destructive influence of the 2019-20 fire season. Salvage work either has or will shortly come to a close. Not all regions have additional resource to supply mills.

Here we can see the gradual decline in the local sales volume. Normally in October, the sales volume is robust, but this year, conditions have muted that expectation from the supply-side, despite the pressures of a rampant demand side.

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In the next chart, we can see that most of the sub-grades experienced sales declines over the last year. However, as the subsequent table shows, the largest declines were recorded for products like ‘Ungraded’ sawn softwood (-19%) and Export (-53%). Though the data is not evidence of this, the more modest declines in structural grades could well be linked to producers doing all they can to build the nation.

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

An emphasis on structural grades makes good sense – prices are significantly higher – but there has also been sharp churn between the Structural grades as this year-end line chart shows.

Sawn Structural Softwood Sales: Oct ’19 – Oct ’21 (m3)

Source: FWPA and IndustryEdge

It is evident that total structural sales were 2.1% lower over the year-ended October 2021. But at 1.465 million m3, local producers simply have no more supply or capacity to offer the market. Having seemingly drawn timber from other grades to produce as much structural as possible, the other ‘swing’ they have introduced has seen declines in the Untreated grades and a rise in the Treated grades.

That can certainly be examined in the table below, but just as significant, it points to the mills that have been impacted most by the fires.

With imports predominantly being structural grades, the next item in Statistic Count assesses how imports are faring in the rush to meet the massive demand in the local economy.