Softwood Timber Sales At Peak As Grade Patterns Evolve

Sales of locally produced sawn softwood products moderated year-ended September but remain effectively at peak, as sales associated with fire salvage logs reportedly came to a halt.

Sales totalled 2.98 million m3 for the year-ended September, down 2.9% on a year earlier, while monthly sales were above the long-term average range at 279,516 m3.

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As we have discussed previously, with production at something approximating peak, the mix or balance of products is changing. There are a variety of complex possible reasons for the product balances changing, not least being the log supply, where the case in point includes a period in which salvage logs were available.

In that context, the chart below shows the last five years’ data for years ended September and the balances shifting from some grades, to others.

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Softwood Timber Survey, Volume, Year End rolling Monthly – By Type
2016M09	2017M09	2018M09	2019M09	2020M09	2021M09	CAGR 5
Outdoor Domestic	264,218	268,236	247,832	239,522	284,246	304,176	2.9%
Fencing	90,256	99,348	118,864	89,940	107,670	106,783	3.4%
Appearance	14,789	17,737	14,086	16,067	18,738	21,831	8.1%
Structural < 120mm	748,026	776,388	737,264	655,950	734,385	656,312	-2.6%
Structural > 120mm	57,447	64,779	65,242	55,742	58,701	58,581	0.4%
Treated Structural < 120mm	669,395	718,098	747,089	621,989	639,341	714,627	1.3%
Treated Structural > 120mm	78,707	67,706	52,324	45,440	51,949	66,596	-3.3%
Landscaping	148,409	154,234	157,096	126,679	136,562	112,954	-5.3%
Poles	27,959	30,220	32,775	33,583	41,578	32,315	2.9%
Packaging	513,444	502,646	550,664	579,955	615,716	630,495	4.2%
Ungraded	276,425	276,282	310,142	272,727	266,311	222,438	-4.3%
Export	210,850	208,713	127,396	92,846	119,274	58,974	-22.5%
Total	3,099,925	3,184,387	3,160,774	2,830,440	3,074,471	2,986,082	-0.7%

Over the course of the last five years, some grades have experienced continual declines – Export is the prominent example. But other significant grades have increased consistently.

While the emphasis is often on the Structural grades – they drive the sector and the housing economy after all – recent attention has been on what were once secondary grades. In that respect, it is difficult to avoid the Packaging grade, which at 630,495 m3 year-ended September has grown an average 4.2% per annum over the last five years, is the third largest local sales grade and accounted for 21.1% of total sales for the year.

The other grade for which sales are above 10% of the total and for which growth has been solid and consistent for the most part is the ‘Outdoor Domestic’ designation. With annual sales topping 300,000 m3 for the first time and pushing out to 304,176 m3, the Outdoor Domestic grade has booked average annual sales increases of 2.9% over the five years and accounted for 10.2% of total sales over the last year.

It is important however to return to the heart of the matter – structural timber. Of the two main structural grades – treated and untreated <120mm – it is clear an exchange is underway and continuing between them. Structural <120 mm (the untreated product) saw sales fall year-ended September, declining 10.6% to 656,312 m3, while sales of Treated Structural <120mm saw sales lift 11.8% to 714,627 m3, to hold a decisive position as the major grade for local sales.

Combined, the two main structural grades accounted for 45.9% of total sales year-ended September, with the larger dimension equivalents adding a further 4.4%.

All this can be observed in the pie chart below.