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 decreased before stabilising as logistics cost increases have reduced and the significant increase in log prices on the back of record-high timber prices have flowed through. The recent logistics cost increases have appeared to subside with fuel prices and CPI peaking. The erosion in log margins appears to have slowed or ceased and one would hope that further log price increases that are yet to flow through will see margins increase in the December quarter of 2022.
For further information and analysis contact Margules Groome.