Australian Softwood Residual Log Price Index – September 2023

29th November 2023

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 indices as shown.

The latest edition of the index indicates margins have reversed and decreased in the September quarter of 2023. This is solely due to increases in logistics costs mainly caused by increasing fuel prices and wages, despite log prices remaining high. It is expected that log prices will start to come down from 2024 following timber prices after the latter rose ~40% during and after the COVID-19 pandemic. If logistics costs remain high, margins will continue to fall in the near future.

For further information and analysis contact Margules Groome.