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Weighted Average Prices Stable for Softwood

Despite softening sales volumes (see previous item) the FWPA softwood weighted average price data series shows prices remained relatively stable in the December quarter 2023. There were however differences in structural grades, between the treated and untreated products.

Prices for the key structural products were varied in the December quarter:

  • G1 Structural Untreated <120mm for Eastcoast saw prices average $721.37 per m3, a decline of 0.6% on the previous quarter and 3.6% lower for the year
  • G4 Structural Treated <120mm for Eastcoast experienced average prices of $899.46 per m3, up 7.0% for the quarter and 4.9% for the year.

The charts here show first the G1 Structural Untreated and second, the G4 Structural Treated price and their trajectories in the December quarter.

Despite softening volumes and perhaps because of an emerging demand-supply equilibrium, the weighted average price appears to be capable of operating at least somewhat independently of the soft sales volumes. When structural timber is needed, it is needed.

Given the reasonable volume stability of sales of outdoor domestic sawn softwood – they improved in three of the four quarters in 2023 – it is interesting to note that the prices of G7 External Treated H3 have kept pace, held ground when other grades declined in the middle of 2023 and used the December quarter to lift again, including to record highs in some markets.

For the Eastcoast market, the G7 External treated H3 weighted average price in the December quarter was $1,099.74 per m3 an increase of 4.1% for the quarter and 5.1% for the year.

Given the pressures likely to come onto sawn softwood packaging timber over coming years, it is interesting to examine the movement of prices for G10 Dry Packaging. In the December quarter of 2023, as the chart shows, the Eastcoast price averaged $388.94 per m3, up 5.5% on the prior quarter but 8.9% lower for the year. This is a product to watch for the industry, but also as a potential bell-weather of the state of the general economy.

There have evidently been some divergent price outcomes in the sales of locally milled sawn softwood products, over the course of 2023. Rebalancing of demand and supply has been a factor – including with imported products – but the impact of inflation on costs also must be considered. Annual inflation at 4.1% has soaked up much of the modest price increases for those grades that were able to achieve them in the December quarter.

Posted Date: February 7, 2024

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