Sources: ABS, AIP, Margules Groome
Margules Groome’s Australian Softwood Residual Log Price Index measures domestic softwood plantation residual log prices (excluding exports). The index is a measure of the residual log value to the forest owner once harvest and haulage costs are subtracted from mill door log prices. It is a measure of the forest owners log margins, or the spread between log prices and logistics (delivery) costs. It should be noted that there is no time lag between the indexes as shown.
The latest edition of the index indicates margins have increased in the December quarter 2022 as predicted. Logistics costs have plateaued, while log prices continued to rise as previous timber price increases flow through. The rises in log prices are also in part explained by recent wood supply tenders which saw substantial increases in log prices for the volumes tendered. The erosion in log price margins has reversed a little in the December quarter, and expectations are that margins will increase into 2023.
For further information and analysis contact Margules Groome.