NZ log exports to China increase

Activity in the Chinese log market has shown little sign of slowing, despite predictions of an inventory buildup  in the approach to the Lunar New Year.
The price of a KS log in China has remained close to the US$141 mark as the softening predicted to accompany the inventory buildup has not yet eventuated.
Figures from the January Agrifax Forestry Market Report show log volumes into China
from Australia, Russia and the United States all declined in November, but for the year to
November, imports were up 19 per cent. New Zealand has increased its market share from 22 to 24 per cent in that period.
With reduced export of commodities, such as coal out of Australia as a result of the Queensland floods, spot shipping rates have declined in recent weeks, allowing for further wharf-gate log price increases.
New Zealand's total log exports for the year to November came in at 9.6 million cubic
metres _ up 20 per cent on the same period the year before. This was driven by a 40 per cent rise in exports to India and a 27 per cent increase into the Chinese market.
However, shipping costs still make India an expensive alternative market, despite steady inquiries from that region.
Japanese exports were also up 39 per cent, but analysts state this was from a  low base in 2009.
China remains the largest market at 58 per cent, followed by Korea on 23 per cent and India on 11 per cent by volume. However, Australia is still the largest market by value. In January to November, NZ$245 million in logs were exported to Australia _ 25 per cent up on the same period in 2009.
This has been helped by a  favourable exchange rate with Australia, but lumber imports from Europe to Australia have increased 113 per cent in the same time frame, moving ahead of New Zealand imports by volume.
While the US continues to be this country's second-largest market by value, volumes for the 11 months to November are a third down on the five-year average.
The report states that some participants in the domestic log market see the current situation as "a perfect storm _ a very unpleasant situation in which several bad things happen at once''.
Factors contributing to that assessment include high prices on the back of the strong export market and "little signs of life'' in the construction industry in New Zealand.
Although non-residential building consents jumped by 76 per cent from October to November, this was largely for education and industrial buildings and factories.
Residential consents remain ``at low levels'' and a fifth consecutive monthly drop in new
housing unit authorisations.
However, sawn timber production rose 15.5 per cent to 1.1 million cubic metres in the September quarter, returning to levels not seen since 2007. Roundwood removals  increased 11.3 per cent to an estimated 6.4 million cubic metres.