Director Sales & Marketing
PF Olsen Limited
The PF Olsen Log Price Index increased $7 in August to $120 which is $3 below the two-year average, $1 below the three year-average and $4 below the five-year average. The August index is $3 above the one-year average, which shows that log prices have been well below average over the last year.
Export Log Market
China softwood log inventory has remained stable at about 4.6 - 4.7m. Fresh pine logs are sold quickly after arrival in China, but some older stock is not moving. The current demand is in balance with supply and log buyers obviously prefer to buy the fresher stock as it arrives. Logs used in furniture manufacturing are also selling faster than logs used in the construction industry. The older stock will more likely be used in the construction industry but will be hard to move until construction activity increases.
Relatively cheap kiln dried sawn timber from Europe is flooding Mundra port in the range of 180 to 200 EUR. This is dampening the already poor demand for the green sawn timber.
A couple of unsold pine log vessels from South America are adding negativity to the already depressed log market. Three ships loaded from South America during August will arrive in Kandla in September. Gandhidham green sawn timber price is INR 571 per CFT for South American sawn timber and INR 621 for Australian sawn timber.
Kandla demand may increase after the Diwali holiday in November.
Shipping costs have continued to drop for log exporters from New Zealand. This is a continuation of the factors described last month: