NZ Log Prices Rise for a Third Round, but Chinese Spot Won't Follow: Importers Should Recalculate Landed Cost First
Latest data from Muylian shows October CFR quotes for New Zealand radiata pine logs climbing to USD 132-137 per JAS cubic metre, up USD 4 on the low end and USD 3 on the high end from September, marking a third consecutive round of overseas price increases. Chinese spot markets, however, are not following. At Rizhao port, 3.9m medium-A radiata pine is quoted at RMB 830 per cubic metre, barely higher; at Taicang, 4m medium-A slipped to RMB 820. The benchmark LG2611 futures contract closed at RMB 816.5 on October 21, drifting lower in a rangebound market. The widening gap between rising overseas offers and flat domestic spot prices is eating directly into importer margins.
The root cause is demand. China imported 40.43 million cubic metres of logs and sawn timber in January-September, down 4.1% year on year. September softwood log imports rose 11% to about 2.22 million cubic metres, with arrivals concentrated and New Zealand's share of the import mix continuing to expand. Volumes are recovering but prices are not, because end demand cannot absorb more: August furniture retail sales fell 7.9% year on year, and downstream mills are buying strictly for immediate needs. Nobody is willing to pay up. Inventory tells the same story: as of early October, radiata pine stocks stood at about 1.78 million cubic metres and total softwood log stocks at about 2.38 million. Stocks are drawing down slightly, but not fast enough to keep pace with pulse arrivals, so port-side spot prices lack the footing for a sustained rise.
Pulse-like arrivals amplify the tug-of-war. In the week of October 5-11, 13 vessels carrying about 462,000 cubic metres arrived at 13 Chinese ports, up 58% week on week; the following week arrivals collapsed 38% to 288,000 cubic metres. Actual arrivals in the week of October 12-18 were 11 vessels and 385,000 cubic metres, up another 5%; the week of October 19-25 is forecast at 9 vessels and 346,000 cubic metres, down 10% again. With volumes swinging wildly around the 300,000 cubic metre mark, clustered arrivals crush spot prices while thin weeks let them bounce back. Importers' purchasing and selling rhythm is being dictated by this volatility.
Notably, ocean freight is not the driver this time. Bulk freight for softwood logs from New Zealand to China is USD 46 per JAS cubic metre for early November, flat month on month, and was USD 48 in early October. The cost push comes from the logs themselves, while freight sits at a low, stable level.
For log importers and timber users, we recommend four things. First, run the full landed-cost calculation for every vessel: CFR price, exchange rate, port charges, fumigation and quarantine, and demurrage risk, all weighed against domestic spot prices. If the spread is clearly negative, slow down vessel acceptance. Second, ship in tranches and stagger arrivals: in a pulse-arrival market, avoid having several vessels berthing in the same week and triggering a price stampede. Third, watch the north-south split: arrivals are skewing south, where processing demand is more active, while the north is weighed down by the property downturn. Discharge port choice directly affects how fast inventory converts to cash. Fourth, lock in contracts while freight is cheap: USD 46 per cubic metre is a low point, a good window to fix quarterly rates and space on the New Zealand-China run before overseas quotes rise further and freight follows.
Rising overseas offers against flat spot prices are, at bottom, a standoff between cost-push supply and weak demand. What separates winners now is not who receives cargo fastest, but who calculates landed cost most precisely and controls arrival pacing most steadily.
