Log prices are little-changed, but higher shipping costs, partly because backhaul capacity is lower, is leading customers to get charged more for this recovery. Domestic demand comes with rising hopes

February At Wharf Gate (AWG) prices at New Zealand ports were largely unchanged from January. Lower shipping costs earlier in the pricing cycle and modest CFR price increases in China offset the strengthening of the NZD against the USD. The NZD has since eased slightly from its January highs and, unlike recent months, currency movements are expected to have minimal impact on March AWG pricing.

However, shipping costs are now trending upward. Reduced import cargo volumes into New Zealand have limited back-loading opportunities, increasing freight rates for outbound log vessels. Log exporters are therefore seeking higher CFR prices in China to recover rising freight costs.

The PF Olsen Log Price Index remains at $121, sitting $2 above the two-year average and in line with the five-year average.

Domestic Log Market 

The gradual recovery in New Zealand’s construction sector continues, although activity remains well below peak 2021–22 levels. Building consent volumes have stabilised after significant declines through 2023–2024, and there are early signs that residential activity may be approaching a cyclical floor.

Sawmillers report steady demand across structural and industrial grades, supported by:

• Pallet and packaging demand linked to horticultural exports
• Infrastructure and maintenance work
• Improved forward ordering compared with early 2025

Structural timber supply has tightened following production curtailments and mill closures over the past 18 months. As a result, pricing discipline has improved, with earlier 3–5% price increases holding in the market.

Mortgage rates have eased from peak levels, and improved business confidence is contributing to more stable building enquiry levels. However, developers remain cautious and new housing starts are still constrained by financing conditions and cost pressures. Overall, while the recovery is slow, domestic sawn timber demand conditions in early 2026 are firmer than at the same time in 2025.

Export Log Markets

China  

Softwood log inventories in China increased during the Chinese New Year (CNY) period as expected and are currently estimated at approximately 2.8 million m³. The increase of 500,000–600,000 m³ over the holiday period is materially lower than seasonal norms, reflecting delayed vessel arrivals from New Zealand due to earlier weather-related harvesting disruptions. Log supply from New Zealand is now expected to increase as harvesting activity normalises. The interaction between rising New Zealand supply and the pace of post-CNY demand recovery will determine whether inventories trend higher or stabilise in March.

Immediately prior to CNY, CFR prices for A-grade logs were around USD 117/JASm³. Exporters are now seeking higher CFR prices to offset increasing freight costs, though the ability to secure increases will depend on post-holiday demand momentum. 

China’s plywood exports rose 7% in 2025 to a record 12.99 million m³, of which 78% was hardwood plywood. Interestingly, hardwood log imports declined 25% year-on-year, indicating greater utilisation of domestic resources and alternative supply channels.

Chinese exports of lower-priced laminated veneer lumber (LVL) into Australia have increased, placing downward pressure on pricing in that market.

The Caixin Manufacturing PMI rose modestly to 50.3 in January, supported by improved new orders. However, business sentiment weakened to a nine-month low amid ongoing concerns around property market weakness and export growth.

Infrastructure fixed asset spend in China has remained positive (mid-single digit growth) but spending in transport, utilities, energy and urban renewal projects is less timber intensive than residential construction. This has contributed to the relatively stable base line demand but will never replace the peak demand during the construction boom.  

India

Approximately 260,000–300,000 m³ of pine logs are expected to arrive at Kandla Port during February. Demand for sawn timber in Gandhidham remains steady, with green sawn timber priced at:

• INR 571–581 per CFT (New Zealand origin)
• INR 541–551 per CFT (South American origin)

Labour availability may tighten in early March as workers return home for the Holi festival and seasonal agricultural activity, which could temporarily reduce sawmill output and support pricing.

Green sawn timber prices in Tuticorin remain around INR 621–651 per CFT, with southern market demand stable.

Export-driven pallet demand remains sensitive to global trade developments. Any improvement in Indian export performance would positively influence industrial timber demand. The Indian market is hopeful the US supreme court ruling on the illegality of tariffs imposed by the US Government, can increase demand for Indian goods to the US. The Trump administration hasn’t yet paid much heed to the ruling though. Increased exports from India would increase demand for wooden pallets and packaging.    

Ocean Freight

Ocean freight costs have increased as inbound cargo volumes to New Zealand remain soft, reducing back-haul opportunities for bulk carriers. Rising bunker fuel prices are also contributing to higher voyage costs.

The BDI is a composite index comprising three sub‑indices: Capesize (40%), Panamax (30%) and Supramax (30%), and reflects average daily USD hire rates across key ocean freight routes. Most New Zealand log exports are carried on Handysize vessels, which are not directly included in the BDI calculation, though broader freight cost trends can still exert indirect influence on this segment.

^{Baltic Dry Index (BDI)
Source: TradingEconomics.com}

^{Singapore Bunker Price (VLSO) (red line) versus Brent Oil Price (grey line)
Source: Ship & Bunker}

Exchange Rates 

The NZD has eased slightly from its January highs against the USD. Unlike recent months, foreign exchange movements are expected to have a limited influence on March AWG prices, with freight costs likely to be the dominant variable. The CNY has continued its rise against the USD, strengthening another 1.65% in the last month.

PF Olsen Log Price Index - February 2026 

The PF Olsen Log Price Index remains at $121, sitting $2 above the two-year average and equal with the five-year average.

^{Basis of Index: This Index is based on prices in the table below weighted in proportions that represent
a broad average of log grades produced from a typical pruned forest with an
approximate mix of 40% domestic and 60% export supply.}

Indicative Average Current Log Prices – February 2026

Note: Actual prices will vary according to regional supply/demand balances, varying cost structures and grade variation. These prices should be used as a guide only.

A longer series of these prices is available here.

This article is reproduced from PF Olsen's Wood Matters, with permission.