Australia has rapidly become a major exporter of softwood logs and was the world’s sixth largest log exporter in 2016. During the 1H/17, the upward trend continued with shipments being 17% higher than in the 1H/16. In 2012, Australia’s annual exports totaled only 1.2 million cubic meters. Just four years later, in 2016, exports had tripled to a record high of 3.6 million cubic meters, of which 96% was destined for China.

If the upward trend seen this far in the first six months of 2017 continues, export volumes will end up totaling more than 4 million cubic meters in 2017, which represents approximately 25% of the total softwood timber harvest in Australia.

 

Obviously, exportation of logs has become an attractive alternative to domestic sales for timberland owners in Australia. WRQ reports that in 2012, there were minimal price premiums for exported logs over domestic logs, but by 2016 and 2017, premiums had surged to between A$35-50/cubic meter.

 

Despite these recent price increases, Australia is still considered to be a low-cost log supplier in the Chinese market compared with other suppliers such as New Zealand, Russia, and North America, mainly because of higher domestic sawlog prices in those markets.

 

Higher log export volumes have occurred at the same time as domestic log demand has gone up more than 20% in four years, from 3.6 million cubic meters of lumber in 2012 to an estimated 4.4 million cubic meters in 2016. Although sawmill production fell slightly in 2016 from the previous year, the output from the Australian sawmill sector reached record high levels the past two years, thanks to healthy domestic demand for softwood lumber.  

 

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