Australia’s sawn softwood timber sales were stable across 2017 fuelled by continuing demand strength and an increasingly widely held view that production capacity is fully stretched. Latest data shows that in 2017, sales totaled 3.109 million m3, down just 0.1% on 2016.
Domestically produced sawn softwood sales have been remarkably stable, on an annualized basis, over the course of 2017. To some extent, this is displayed in the chart below. But the chart does not truly demonstrate just how tight the annual sales have been.
On an annualized basis, sales peaked in March at 3.156 million m3, and in April, were at their low of 3.107 million m3. Across the year, the difference between the high and low months was just 1.6% or less than 50,000 m3, equivalent to around four days total production across the year.
To go straight to the dashboard and take a closer look at the data, click here.
The genuine suspicion must be that Australia’s capacity to supply sawn softwood products is seriously stretched and tested. We say suspicion because this data does not deal with inventories, but it is increasingly unlikely that in the face of high demand, anyone is holding back for any reason other than commercial commitments. Certainly not for a full year.
One factor to take into account in this robust and near complete data series is that closures of mills (for instance the former Morwell mill of Carter Holt Harvey) will bring the data down each month, and over time, on an annualized basis. We can see that impact in the December sales data, which was 9.1% lower (approximately 18,000 m3) than in December 2016. Lower monthly sales data will of course feed into lower annualized sales, with the effect becoming more pronounced as every month passes over the next year.
Looking at the year-end sales data, by grade, for the last four years, provides some unsurprising pointers as to the source of the growth to two successive years of sales above 3 million m3. It is the sawn products that have provided the greatest impetus to growth.
To go straight to the dashboard and take a closer look at the data, click here.
Treated Structural <120mm has grown its share substantially, with sales growth over 54% since 2014. But in part, it has replaced other sawn timber products, particularly its untreated counterpart Structural <120mm. It is a similar story for the >120mm Structural products.
The other grades to really chunk on the growth since 2014 have been the 29.1% increase in sales of Outdoor Domestic sawn softwood, followed by packaging grade growth of 17.2% over the same period.
The table below sets out each of the grades of Sawn Softwood, their reported sales for 2017, and the % change from the prior year.
| Description | 2016 | 2017 | % Change |
| Outdoor Domestic | 271,805 | 260,454 | -4.2% |
| Fencing | 94,139 | 99,218 | 5.4% |
| Appearance | 14,668 | 18,060 | 23.1% |
| Structural < 120mm | 756,355 | 752,979 | -0.5% |
| Structural > 120mm | 57,503 | 64,965 | 13.0% |
| Treated Structural < 120mm | 683,477 | 731,792 | 7.1% |
| Treated Structural > 120mm | 76,074 | 62,574 | -17.8% |
| Landscaping | 146,899 | 152,440 | 3.8% |
| Poles | 26,815 | 32,223 | 20.2% |
| Packaging | 506,131 | 483,130 | -4.6% |
| Ungraded | 279,232 | 263,046 | -5.8% |
| Export | 224,552 | 188,230 | -16.2% |
| Total | 3,137,649 | 3,109,111 | -0.9% |
This data shows that some of those grades that performed well up to the beginning of 2017 (and therefore over the course of the last four years), have started to feel the pressure of high demand. In the main, they seem to be cheaper products, implying that marginal decisions may be being taken to produce higher value products (especially structural) than some of the others.
