Some analysts believe the China log market has bottomed out. A Grade radiata pine in China was at a price level last seen at the bottom of the 2011 market downturn, said forestry management company PF Olsen, in this month's edition of the company's Wood Matters newsletter. But August had seen a reversal in the dramatic four-month slide in export log prices, driven mainly by reduced ocean freight costs and a lower kiwi dollar, said PF Olsen. Despite the high inventories and weak real estate market, China growth remained high and construction activity continued to be driven by government-supported low-cost housing.
"If this is the bottom of the cycle, and if ocean freight rates and foreign exchange don't move unfavourably, most are forecasting a steady improvement in export log prices for the remainder of the year," said PF Olsen.
"However, until log inventory in China falls by 25 per cent or more, there will continue to be nervousness about the robustness of any market recovery."
However, Mr Cairns said, dairy volumes handled by the port were expected to increase, and imported fertiliser and dairy feed supplements to remain strong.
The impact of the 10-year freight alliance with Kotahi was beginning to kick in, in Tauranga and the port's Timaru operations, he said.
"We've become very busy, very quickly, in Timaru, which is pleasing."
