The trough that barely dipped
After three brutal years, New Zealand’s export log market is finally showing signs of life. The 2026 price trough has landed at just 5% below the 12-month average, according to Marcus Musson, chief operating officer at Stand Forestry, writing in the NZ Herald. That is the shallowest correction in four years, compared with 8% in 2025, 10% in 2024 and a punishing 25% in 2023.
At-wharf-gate prices for A-grade short logs have recovered into the early NZ$120s per JAS by July, bouncing back from a June dip Musson attributes to the ‘Trump effect’ – a mix of war-related freight costs, foreign exchange pressure and softer buyer sentiment that knocked spot prices by around NZ$8/JAS. The PF Olsen Log Price Index confirmed the June dip, dropping NZ$3 to NZ$119, still level with the five-year average.
Three headwinds have all turned
What makes Q3 look like a genuine inflection point is that the three factors behind the June correction have reversed at once. Freight costs are expected to fall from the mid-US$40s to the high US$30s per unit later in July. The kiwi dollar has slid to a seven-month low in the mid-US$0.56 range, sharpening export competitiveness. And CFR prices in China have started edging higher.
Global Wood Markets Info noted on 9 July that ‘the sharp deterioration that many feared at the end of the second quarter has failed to materialise,’ with export returns stabilising, shipping costs easing and seasonal Asian demand showing early signs of recovery. Timber Industry News reported the same week that port inventories have held steady and daily consumption is recovering as the rainy season subsides.
Everything rides on Chinese cranes
Here is the uncomfortable reality. The recovery case hinges almost entirely on China’s construction season firing up. Chinese daily log consumption sits in the early-to-mid 50,000 cubic metre range, and Musson expects it to push through 60,000 cubic metres a day by late August. Port inventories at around 2.5 million cubic metres are manageable, not a glut.
The dependence is structural. MPI data for 2025 shows NZ forestry exports worth NZ$6.28 billion, with 55% going to China and logs and poles alone worth NZ$3.4 billion. Allan Laurie of Laurie Forestry, in his June report, notes NZ is the largest supplier of softwood logs to China, ‘currently hovering around 70-80% of all supplies.’ He is blunt about who holds the pricing pen: ‘There is no grand plan in China to gear prices for NZ logs. If we should shorten supply, prices will lift, but only in so much as China domestic pricing will allow.’
The supply story is the real prize
The more durable tailwind is supply. Large-scale storm windthrow in the upper South Island and lower North Island flooded the market with price-insensitive salvage timber that hit wharves regardless of conditions. But those forests cannot be harvested again for decades. The lower North Island salvage is now mostly complete, and the pattern has already played out around Taupo, where harvest levels fell sharply after the post-Gabrielle salvage wound down. As Global Wood Markets Info put it, ‘forests harvested today because of storm damage cannot be harvested again tomorrow.’ With no large-scale alternative harvest opportunities elsewhere, NZ’s total log supply is set to decrease incrementally, tightening the market.
India and a domestic bright spot
Diversification is finally showing teeth. Around 12 vessels are planned from NZ to India in July, with India’s CFR prices in the late US$160s per cubic metre against US$124 in China, netting better returns despite higher freight. Closer to home, residential building consents rose 19% in the year to May, ending three years of decline and lifting domestic timber demand.
Less bad money, not good money
The official view stays cautious. MPI’s June Situation and Outlook forecasts forestry export revenue easing 1% to NZ$6.1 billion this year, with a further 2% drop in 2026-27. As Musson dryly puts it, returns are ‘more predictable, not more palatable.’ For logging contractors, transport operators, port workers and rural lenders across Tasman, Marlborough, Hawke’s Bay and Gisborne, a sustained lift would be felt fast. The sector is making less bad money, and Q3 could be the turn – provided, as Musson notes, ‘Trump doesn’t have another military brainwave.’
Sources
- Forestry Q3 outlook: Supply constraints and stronger demand may lift log prices – Marcus Musson (2026-07-17)
- The tide may finally be turning for New Zealand’s log market – Global Wood Markets Info (2026-07-09)
- The tide may finally be turning for New Zealand’s log market – Timber Industry News (2026-07-09)
- June log market report – interest.co.nz (2026-06-25)
- Monthly Reports – June 2026 – Laurie Forestry Ltd (2026-06)
- Wood product markets data – MPI (2025-12)
- Situation and Outlook for Primary Industries – MPI (2026-06)