The New Zealand Government reported this week that it will not consider limiting timber exports to increase supply, particularly as New Zealand tackles a timber shortage for housing, according to a recent stuff.co.nz report.
A shortage of timber and building products is continuing to hamper new home builds while the housing boom post-lockdown has seen house prices skyrocket, with lack of supply cited as a primary reason.
Poto Williams, Minister for Building and Construction was reported as planning to place limits on timber exports in an effort to protect domestic supply. However, Minister Williams said this week that the Government would not be interfering in timber exports as this was something for suppliers to manage.
Minister Williams said that she had received advice that some suppliers were already increasing structural timber production over the next six months, reducing exports, and moving stock from the South Island to the North Island where demand was higher.
“This government has already signalled our intention for building products to be the subject of a market study by the Commerce Commission,” Minister Williams said.
In March, Carter Holt Harvey stopped supplying wood products to major retailers. Carter Holt, the country’s largest producer of structural timber had already stopped supplying wood products to major retailers in March, saying that there had been “short-term industry-wide” supply issues.
Building Industry Federation Chief Executive, Julien Leys, said the structural timber shortage was the worst in living memory.
Shipping delays due to the pandemic were also disrupting imports at a time when there were fewer domestic sawmills producing timber locally, big domestic demand, and “a staggering amount” of timber being exported, and shortage was likely to continue for at least another year, Mr Leys said in the report.
“Historically New Zealand has been a reasonably big exporter of certain grades of logs, for pulp and other non-building purposes, but the grading of logs being exported now includes structural timber. We are exporting such huge amounts, and using it ourselves in an absolute building boom,” he said.
Relations between China, New Zealand’s biggest market, and Australia have worsened over the past 18 months over a series of issues, with China turning to New Zealand for timber that could be processed into furniture, Mr Leys said.
Red Stag Chief Executive, Marty Verry also said in the report that structural timber supply was tight, down about 10 per cent, partly due to the shut-down of Carter Holt Harvey’s Whangarei sawmill.
Red Stag had increased its output and also brought back timber from export markets to supply into the New Zealand market. The company also cut over one million tonnes of logs a year, producing 625,000 cubic metres of timber, of which about 250,000 cubic metres was for framing timber. This equated to about 30 per cent of New Zealand’s timber framing supply, Mr Verry said.
Demand was easing a little due to winter slowing work on building sites but it would pick up again in summer.
“The next year is probably going to be still patchy. Some clients are reasonably be fine, the ones that have been loyal to us and looked after us over the years, the ones with long-term relationships, they’re getting reasonable supply,” Mr Verry said.
Domestic returns were good because there was no export cost, which was significantly higher post-COVID, he said.
The building products arm of Fletcher Building, PlaceMakers, said it had not been moving stock between the North and South islands to manage supply.
“PlaceMakers, like other building material distributors, are seeing a greater demand for products which can largely be attributed to New Zealand’s current record buildings levels creating un-forecasted levels of demand for materials,” Fletcher Building Distribution Chief Executive Bruce McEwen said in the report.
The main supply challenges were in products such as structural flooring, structural timber and outdoor timber for decking, fencing and retaining.