Korean, Chinese log markets stay firm

The approach of the Chinese New Year saw log prices in China and Korea remain steady during November.
Chinese New Year occurs in early February and the latest Agrifax Forestry Market Report shows a flattening of export log pricing in anticipation of reduced demand among end users during this holiday period and throughout the Northern Hemisphere winter.
Monthly volumes into China have been above 2.1 million cubic metres since March and are expected to remain at these levels for some months.
Timber tariffs are part of the recent agreement between the Russian Federation and the European Union and these are expected to fall to about a quarter of today's levels. While no official details have been released, Russian log exports to China are expected to be affected, becoming more competitively priced.
Analysts said this was unlikely to affect New Zealand log exports to China in the near future due to the escalating demand for both logs and lumber there.
Meanwhile, the Indian market is starting to lose some appeal for New Zealand log exporters as discharge delays cause shipping costs to remain high.
Japan has experienced improvement in wooden-structured building starts, reaching levels of 4.5m cubic metres a month - activity not seen since early 2008.
Things are not looking so positive in Australia where the lumber market saw a reduction in finance and dwelling approvals in the September quarter. But approvals of dwelling units rose slightly in October to finish 3.5 per cent ahead of the same period last year.
New Zealand supplies into the US are significantly down, although the stronger New Zealand currency is expected to contribute to slightly firmer prices.
Housing starts and approvals in the US remain at a third of the five-year average, but the chief executive of Toll Brothers, the largest luxury home builder in the US, has predicted the housing market there will rebound in 2011 leading to "a big year" in 2012.
Domestically, log prices have remained at their fourth quarter levels, except pruned grades, which have recovered lost ground.
Upwards pressure on domestic prices is expected to result from the increase in wharf gate export prices as shipping costs drop back, but this is likely to coincide with the softening of demand for the Chinese New Year.
CARBON MARKETS
New Zealand units are trading marginally above $20, but prices have hit a ceiling as the European Carbon Emission Reduction units fell enough in value to compete.
A large issue of these European units have recently been awarded to projects cutting emissions in developing countries, which will put downward pressure on the NZU price.
In New Zealand, the Ministry of Agriculture and Forestry has now allocated more than 5.1 million units to 585 post-1989 forest owners. It has also made final determinations on 39 applications for pre-1990 forest.
Increasing wharf gate export prices are expected to drive domestic prices upwards.