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 again in the March quarter 2023. Logistics costs plateaued in December quarter 2022 and decrease in the March quarter 2023. Log prices appear to have risen to their peak based on timber prices having virtually plateaued in the March quarter 2023. Expectations are that margins will increase into 2023 as logistics costs are expected to fall faster than timber prices (if timber prices fall at all).
For further information and analysis contact Margules Groome.