The Island Specialty Timbers March tender results posted today show a dramatic drop in market sentiment. Prices for all species were dramatically down on recent trends.
Whether this is a temporary dip or the start of something bigger remains to be seen. Certainly the increased political debate and tensions around the forest industry as a result of the new Federal Government and the State election campaign are severely damaging for the forest industry and general market sentiment. Why would anyone want to invest in an industry at the centre of such a destructive storm?
Only two blackwood logs were included in the March tender of 22 items. Prices were subdued for all species, even for the popular blackheart sassafras.
Both blackwood logs were of good size with plain grain; but prices were a disappointing $180 and $300 per cubic metre, representing $277 and $405 per log. Remembering that two of the three logs tendered last November failed to sell, this continues to demonstrate a weak blackwood market over the past few months.
Then again, even at $180 per cubic metre for good plain-grain blackwood sawlog, that still represents a profitable $50,000 per hectare for a mature blackwood plantation.