Sawn Softwood Imports Continue To Grow As Average Price Rises
The rise in imports, shown in the chart below, over the longer term, has come about because domestic capacity is constrained, while demand is very strong. In particular, the closure of the Morwell sawmill has fuelled the sharp lift in imports of the first half of 2018.
Below, we can observe the same data over a shorter time period, but with the average price of sawn softwood recorded with it. It shows that average price of aggregated sawn softwood products has risen over the last few months, but not to levels experienced earlier in the last two years.
Isolate the data to the first half of 2018 and we can observe the Australian dollar has depreciated 8.0% since January and 2.4% against the Euro.
Rather than drill into every import grade, the next chart shows just the grade that accounts for the largest volume. This is Dressed Sawn Softwood, other than Radiata (so largely excluding the local trade from New Zealand). It shows imports rose (by 47.9%) to a record 242,665 m3 over the year-ended June. It also shows that the average import price in Australian dollar terms rose 19.0% over the same period, to AUDFob391.95/m3 in June 2018.
This data shows that all the major countries involved in the trade are from Europe, with most transactions conducted in Euro. Imports from the largest supplier – Estonia – were up 34.3% over the year, however, other countries actually saw larger proportional volume increases.
It does seem, on balance, that imports have risen because demand has expanded or perhaps stayed the same while local supply has reduced. However, unlike in many other situations, price has not been a victim, with higher prices supported by a depreciated Australian dollar being evident.
It is likely they are continuing to move domestic prices higher also.
This article was written by Jim Houghton for FWPA’s latest StatisticsCount.