Prices for key sawn structural softwood products continued to climb in the June quarter, feeding into average prices that were around one third higher than for the June quarter of 2021. Treated product prices are leading the charge, but not by much.
The focus is inevitably on the major structural products. In the first chart we can see Untreated Structural <120mm MGP Grades. The average price lifted 4.9% in the June quarter, rising 32.1% on average across the East Coast over the last year. In the June quarter of 2022, the weighted average price was $755/m3.
To go straight to the dashboard and take a closer look at the data, click here.
Now the larger volume grade (but still not by much), the Treated Structural <120mm MGP Grades average price lifted 4.8% in the June quarter, feeding into a 32.7% average price increase over the last year. In the June quarter, as we can observe below, the weighted average price lifted to $846/m3.
To go straight to the dashboard and take a closer look at the data, click here.
Pricing associated with other grades of sawn softwood can be interrogated via the FWPA Data Dashboard.
These heavy price movements have been associated with a solid supply response. As the chart here shows, local sales continue at elevated levels, with the main structural grades continuing their dominance. While the Structural <120mm grades are the major products in the market, other products, led by Packaging and Outdoor grades are also important.
The continued swing towards treated structural grades is evident in the chart and table.
To go straight to the dashboard and take a closer look at the data, click here.
|
Grade |
2018-19 |
2019-20 |
2020-21 |
2021-22 |
% Change 20-21 v 21-22 |
|
Outdoor Domestic |
238,738 |
264,907 |
320,665 |
321,341 |
0.2% |
|
Fencing |
91,376 |
100,652 |
119,190 |
112,521 |
-5.6% |
|
Appearance |
15,296 |
16,120 |
23,913 |
17,402 |
-27.2% |
|
Structural < 120mm |
671,985 |
717,153 |
717,272 |
649,393 |
-9.5% |
|
Structural > 120mm |
57,268 |
58,295 |
68,243 |
66,637 |
-2.4% |
|
Treated Structural < 120mm |
660,596 |
620,772 |
723,049 |
744,234 |
2.9% |
|
Treated Structural > 120mm |
48,771 |
49,837 |
62,716 |
70,661 |
12.7% |
|
Landscaping |
128,984 |
133,472 |
129,132 |
114,039 |
-11.7% |
|
Poles |
33,128 |
39,068 |
35,218 |
29,171 |
-17.2% |
|
Packaging |
566,618 |
592,317 |
686,701 |
652,591 |
-5.0% |
|
Ungraded |
289,616 |
267,926 |
266,852 |
269,483 |
1.0% |
|
Export |
98,512 |
110,848 |
77,771 |
39,202 |
-49.6% |
|
Total |
2,900,890 |
2,971,367 |
3,230,723 |
3,086,676 |
-4.5% |
It is important to note the context in which sawn softwood prices are increasing: higher building costs are being felt everywhere and for pretty much all materials. An HIA analysis of Victorian Building Authority data shows (quoted in the Age 9 July) that in December 2020 an average Victorian housing project was $245,000 while a year later it has jumped to $313,000, an increase of 28%.
Rising materials costs are impacting the home building sector: major builders are under cost pressure and many small to medium builders are exiting what has been a profitless boom for many.
Higher but moderating building costs are also reflected in the June quarter producer price index for house construction. The peak for timber products appears to have been Dec 2021 with steel products peaking in March 2022 quarter. Given the volatility the trend from here is still unclear with prices still higher than the previous year.
Taken in totality, the price increases for structural timber are ‘in bounds’ with other building materials. So while the pipeline of work discussed elsewhere is moderating it is still at exceptionally high levels. This will continue to drive strong demand in the foreseeable future with remaining supply chain challenges.
