Record timber prices will not impact NZ sawmills, Pan Pac manager says

Pan Pac managing director Doug Ducker. Photo/File

Warnings of record timber prices should not have an impact on sawmills here, Pan Pac managing director Doug Ducker says.

Just a day after JNL announced it was considering scrapping 97 jobs at its Gisborne mill, the New Zealand Timber Industry Federation yesterday said it expected timber prices would rise further on the back of record log prices.

However, Mr Ducker said because the company's Whirinaki plant was focused mainly on the New Zealand market, price rises could be managed.

"We're not exposed to the issues that might have been raised with JNL. That's the Japan market that has influenced them and not directly related to the New Zealand situation.

"Log prices are basically stable at the moment but they are stable high and that's impacting the ability to recover the cost of that wood but we're managing it."

The New Zealand Timber Industry Federation said log prices had already risen by 25 percent to the local market over the past five years and sawmills are preparing for further predicted log cost increases over the first half of 2018.

"Logs are a sawmill's biggest single cost so the financial impact is significant," a Federation spokesman said.

"Local sawn timber prices have not kept pace with the recent log cost increases. Timber prices have risen by just 7 per cent in the last five years."

New Zealand exporters have spent decades pushing Radiata Pine as a species and product.

Overseas buyers' increased understanding of the many potential uses of Radiata Pine is fuelling the demand and making Radiata Pine a preferred species in many cases.

The New Zealand Timber Industry Federation said that timber prices will increase as sawmills look to secure sufficient log supply to keep mills running and to recover the increased log costs.

Buyers of finished timber products could anticipate future price increases.