Domestic timber prices prove resilient to global economic gloom
MELBOURNE, VIC — June 4, 2009 — The inaugural quarterly Australian Timber Market Survey (TMS) released today by consultants URS Forestry has revealed a resilient local timber market, with domestic prices for softwood timber products declining marginally in the March quarter despite a downturn in construction activity and the general economic environment.
The quarterly TMS, compiled by URS Forestry on behalf of a consortium of leading forestry organisations, provides a comprehensive overview on timber price movements and market trends in Australia.
As well as relatively stable prices for sawn softwood timber, the TMS showed a strong up-tick in prices for panel products such as plywood and fibreboard in the March quarter, reflecting sustained demand fuelled in part by an improving export market.
Prices for engineered wood products such as laminated veneer lumber (LVL), increasingly used in heavy duty construction, fell by smaller amounts than softwood sawn timber but have maintained gains from recent years.
Commenting on the TMS report, Andrew Morton, Vice President of URS Forestry, said: "the strong domestic focus of local producers had insulated the industry from deterioration in offshore timber markets.
"Prices for Australian softwood timber, which is predominantly used in residential construction and represents the largest traded sector of the local industry, have held up well," he said.
"For the last two quarters softwood prices have softened slightly, but producers still remain in a healthy position following the significant growth experienced between 2004 and the end of 2008. Conversely, in North America the domestic price for softwood framing timber has decreased by 28% since September 2008," Mr Morton said.
Historic quarterly nominal price index of key softwood timber products
The TMS showed a significant decrease in softwood timber import volumes over the past 9 months, driven largely by a slowing Australian economy and the fall in the Australian dollar against the $US. Softwood sawn timber, one of Australia's most significant wood product imports, fell by 55% between the June quarter 2008 and March 2009.
Quarterly Australian trade in softwood sawn timber by volume
Imports of plywood and veneer decreased by around 40% since the September quarter 2008 while exports volumes have risen, largely due to the commissioning of two new veneer mills in Tasmania.
Mr Morton added: "the outlook for Australia's timber market was stable given low interest rates, the extension of the first home owners grant and Government spending on 'shovel-ready' projects, the effect of which in stimulating construction, activity should soon become evident".
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