IST Tender Results 2016-17

ist

http://www.islandspecialtytimbers.com.au

Back in December last year I wrote my first report summarizing all tender results for Island Specialty Timbers given that IST itself provides little market information.

https://blackwoodgrowers.com.au/2016/12/13/island-specialty-timbers-tender-results/

So here is my half yearly update and financial year summary of their tender results.

A separate report looks specifically at IST blackwood tender results, given that blackwood is the only specialty timber species for which this information might have some use for market and investment purposes. No one is going to invest money based on the tender results for the other specialty species, which are too slow growing to allow for profitable investment.

https://blackwoodgrowers.com.au/2017/06/12/ist-blackwood-log-tender-results-2016-17/

Six-monthly update

The last 6 months have seen 4 IST tenders with total volume of 83 cubic metres of specialty timbers put to tender of which 58 cubic metres were sold, and total revenue of $49,100.

Financial year

The 12 months to June 2017 saw IST conduct 8 tenders with total volume of 166 cubic metres of specialty timbers of which 107.5 (64%) cubic metres sold for total revenue of $114,300.

This 166 cubic metres represents about 1% of the annual harvest of special timbers from Tasmania’s public native forests. The rest is sold at Government prices on long term sales contracts.

For harvesting the 166 cubic metres of special timbers in the year Forestry Tasmania received an additional $14,000 from Tasmanian taxpayers as compensation.

Compare this with the 3,000 tonne of specialty timbers auctioned by the Western Australian Forest Products Commission every year:

https://blackwoodgrowers.com.au/2017/05/01/special-timbers-in-western-australia/

IST2017pricechart

The above chart shows the log volumes and average unit prices paid per tender.

The price spike for December 2016 reflects a tender of 7 Huon pine lots.

The highest unit price for the year was a small black heart sassafras log of 0.49 cubic metres that sold for $5,100 per cubic metre!! This is an extraordinary price for such a small log.

The highest total price paid for a log was for a Huon pine log of 1.75 cubic metres that sold for $5,160.

These results show that when subject to competitive forces even the little southern Tasmanian special timbers market can afford to pay very good prices for quality logs.

Three species attracted strong demand and high prices over the year, these being black heart sassafras, huon pine and banksia with average log prices over $1,000 per cubic metre. Celery top pine sold for an average price of $630 per cubic metre. All of these species take 400-1,000+ years to reach maturity so I suspect even these prices are cheap.

Black heart sassafras made up 25% of the successful tendered volume but made up 44% of the sales revenue. Blackwood, the dominant special timber, made up 7% of the successful tendered volume but only 5% of the revenue. Huon pine made up 20% tendered volume and 11% revenue.

Black heart sassafras, blackwood, myrtle and wattle comprised 15%, 24%, 16% and 20% respectively of unsold log volume.

The low volume and variable quality of products tendered by IST makes it difficult to draw conclusions from these results, except to repeat that quality wood is worth big money.

Remember these prices are equivalent to mill door log prices, so harvesting and transport costs are theoretically included in the prices.

And don’t forget these public native forest specialty timbers come to you courteously of an $86.27 per cubic metre direct taxpayer subsidy.

https://blackwoodgrowers.com.au/2016/11/13/special-timbers-subsidised-charade-continues/

Tasmanian taxpayers certainly have abundant generosity (and deep pockets) when it comes to the forest industry.

Advertisements

5 responses to “IST Tender Results 2016-17

  1. Hello Gordon

    Well done! This report deserves publication on Tastimes. I’ll be looking forward to reading it there.

    Regards

    John Maddock

  2. I hope the banksias we’ve planted don’t take 100’s of years to reach a commercial size. We’ve planted a load of marginata and some integrifolia. I should do some measurements but I’d say 1cm+/annum so far. For anyone considering planting marginata with the intention of growing a sawlog, an upright form provenance of this species will probably better suit this use.

    I’ve thought about planting some Huon, King Billy etc. There’s a guy in the Otways who has had success with these species. But as Gordon says they take so long that this would be more of an arboretum project than a commercial endeavour.

  3. On a good site (sheltered, low elevation and plenty of moisture), King Billy can attain 50cm in 100 years. Sassy doesn’t take anything like 400+ years to reach a decent size.

    • In the order of 100 years is an acceptable rotation for some species in the northern hemisphere. I’ve visited agroforestry properties in Austria where they were harvesting trees planted by the owner’s grandfather. European foresters will work with even longer rotations for oak and other species.

      If you have continuity of ownership within a family a 100 year rotation for King Billy might be attractive. Or if there was a good market in Gippsland for properties with trees then we could plant longer rotation species with the expectation that the future value (with appropriate time value of money discount) of the standing timber would be recognised in the property sale price. Growing trees of these species might increase property vale for the right buyer due to their for their

      Our block is between 170-230m. We have some sheltered areas near creeks/drainways/seeps etc with S and SE facing aspects that might be suitable for some of these species. We should plant a few on general principles.

      Do you have some indicative rotation lengths for some of these Tasmanian species, Stu?

      • King Billy and Sassy in the order of 150 years to reach 60cm+, a long time frame but then some northern european farm foresters are growing trees on these sort of rotations. Don’t waste your time with myrtle or any other minor species unless planting for amenity.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s