Category Archives: Island Specialty Timbers

Another blackwood timber price list

Here’s a blackwood timber price list for a timber retailer in Tasmania.

This sawmiller/retailer specialises in Tasmanian “specialty timbers”.

These timbers obviously come from Tasmanian public native forest, which as everyone should know by now, comes to market at great cost to Tasmanian taxpayers and the plundering of the last of our oldgrowth and rainforest.

https://www.theguardian.com/environment/2018/mar/29/tasmanian-forest-agreement-delivers-13bn-losses-in-giant-on-taxpayers

These prices are for individually priced boards, kiln dried and dressed, select grade (ie. Knot-free plain grain).

I’ve sorted these boards by the wood volume per metre, which seems to provide the best (but by no means perfect) explanation for the variation in price. The other curiosity besides the odd pricing structure is the diverse range of dimensions.

Note the variation in price for the boards of the same dimension eg. 310 x 32mm.

Given that timber is sold in Australia just on a price and NOT price per m or price per cubic metre, most customers would not spot this fraudulent behaviour.

Buyer beware!

ZXSJT

That this sawmiller is getting away with selling select grade blackwood for $8,000 per cubic metre should get some tongues wagging (I hope!).

The fact that getting this timber to market costs Tasmanian taxpayers is the criminal aspect of all this. Welcome to the Tasmanian forest industry!

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IST Special Timbers Tender 6 Monthly Update

Here is my 6 monthly report of IST special timbers tender results. My last report can be found here:

https://blackwoodgrowers.com.au/2017/07/27/ist-tender-results-2016-17/

The last 6 months have seen Island Specialty Timbers conduct 3 tenders with total of 42 cubic metres of product put to tender.

http://www.islandspecialtytimbers.com.au/

Total tendered volume sold was 34 cubic metres (81%) with total revenue of $34,000.

IST1217Chart1

The chart shows the price and volume trends over the last 2 years for the IST special timbers tenders. Sawn timber products are not included in the chart. Unfortunately the diversity and quality of products put to tender are so variable, and the volumes so small, that very little analysis is possible; except to say that the market is prepared to pay very high prices for premium quality wood.

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

That these logs from Tasmanian public native forests are subsidised by Tasmanian taxpayers may also have some influence on the price.

The following chart tracks the average sold log volume. Many of the logs sold are very small. For comparison a target plantation blackwood log pruned to 6 metres with a dbh of 60 cm would have a volume of 1.5 cubic metres.

IST1217Chart2

With the Tasmanian State Government now giving away special timbers at taxpayers’ expense from Tasmania’s conservation reserves under the new Special Timbers Management Plan, we can expect log prices to drop dramatically.

Private forest growers are in for a tough time.

In fact I would think that IST’s days are well and truly numbered.

https://blackwoodgrowers.com.au/2017/10/23/tasmanian-rainforest-plunder/

Island Specialty Timbers, (IST) an enterprise of Forestry Tasmania was established at Geeveston in 1992 to increase the recovery, availability and value of specialty timbers from harvesting activities in State forests.

So much for “enterprise”! So much for “value”!!

More like complete market destruction.

 

Since this is my final report for 2017 I’ll take the opportunity to wish readers the best of Seasons Greetings.

The New Year brings another divisive and destructive State Election for Tasmania with forest policy yet again a hot election issue.

When will Tasmania get a fully commercial, profitable forest industry?

IST Tender Results 2016-17 addendum

https://blackwoodgrowers.com.au/2017/07/27/ist-tender-results-2016-17/

Looking at how small some of the IST tendered logs are, I thought I’d create a chart showing average sold log volume.

ISTSoldVol

For some context to this chart, the target plantation blackwood log is 1.5 cubic metres in volume (DBH 60 cm pruned to 6 metres).

So you can see from the above chart that IST sold logs are pretty small. In fact given that the chart shows the average volume, some of them are downright tiny (less than 0.1cubic metres).

That these small logs can command such high prices is quite extraordinary.

I’ll include this chart in future reports.

 

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.

IST Blackwood Log Tender Results 2016-17

1617logs

In the interests of greater market and price transparency in the forest industry here is my annual summary of blackwood log tender results from Island Specialty Timbers (IST) for the 2016-17 financial year.

http://www.islandspecialtytimbers.com.au

This is the only publically available competitive market price data for blackwood logs.

During the year 20 blackood lots, totalling 20.4 cubic metres, were put to tender over 5 of the 8 tenders held by IST. That equates to 1 single truck load of blackwood material! Of the 20 lots put to tender only 6 were sold, totalling 7.2 cubic metres!

It’s been a quiet year for the local blackwood market.

Last year (2015-16) Forestry Tasmania sold 9,580 cubic metres of blackwood logs and craftwood, with the vast bulk of this volume sold on private long term sales contracts. The tiny volume sold through public tender by IST represents just 0.07% of the blackwood harvested from the Tasmania’s public native forest.

http://www.forestrytas.com.au/about-us/publications

For the August and September 2016 tenders IST put to tender 7 lots comprising pairs of blackwood logs. In the August tender the pairs were logs cut from single trees, whilst in the September tender the pairs were from different trees. All were plain grain logs. Only 2 of the pairs from the August tender sold.

None of the 11 blackwood lots from the September and November 2016 tenders sold!

Then came the March 2017 tender where 2 large blackwood logs from the same tree featuring tear drop grain were put to tender. Total volume for these two logs was 2.59 cubic metres. The larger butt log went for $1575 per cubic metre whilst the smaller head log sold for $1625. Total value for this single blackwood tree totalled $4130!! These logs provided the highlight in an otherwise quiet year.

Actually despite the low volumes sold plain grain blackwood logs didn’t do so bad. The 4 plain grain lots that sold averaged $418 per cubic metre for some reasonable quality logs, with prices up to $550 per cubic metre. I regard that as a good price.

The table below summarises the IST blackwood tender results for the 2016-17 financial year:

IST 2017 BWD summary table

The 20.4 cubic metres of blackwood put to tender compares with the total of 166 cubic metres of specialty timbers that IST put to tender in 2016-17, or only 12% of the total volume. This is despite the fact that blackwood is by far the dominant specialty timber harvested in Tasmania.

The chart below shows the average blackwood tender prices and total volumes for the past 4 years.

IST BWD pricevolume trend

Unfortunately the volume of IST blackwood tender material is too small and the quality too variable to allow meaningful market/price comparisons between years. Also IST generally only caters to the local southern Tasmanian craftwood market.

Large volumes of large, good quality logs from blackwood plantations should generally command better prices than shown by the IST result.

The blackwood market desperately needs more tradability, more transparency and more commercial credibility.

The only basis for a successful forest industry is profitable tree growers within a competitive, transparent marketplace.

Caveats:

  1. Island Specialty Timbers (IST) is an enterprise of Forestry Tasmania established in 1992 to increase the recovery, availability and value of specialty timbers from harvesting activities in State forests.
  2. Forestry Tasmania manages its special timbers operations (including IST) as a taxpayer-funded, non-commercial, non-profit, community service. Last year each cubic metre of blackwood log harvested by Forestry Tasmania received a taxpayer subsidy of $86! No private blackwood grower received any taxpayer subsidy.
  3. Note that all logs and wood sold by IST come from the harvesting of public native old-growth forest and rainforest certified under AFS (PEFC).
  4. It is unlikely that this tiny set of market-based blackwood log prices is representative of the broader blackwood market.
  5. The dataset is too small and variable in quality to allow any analysis or correlations to be made between price and log quality apart from the obvious result that feature-grain logs attract a significant price premium over plain-grain.
  6. These tender prices are effectively mill door prices that already include harvesting and transport costs. They are not stumpage prices.

So whilst Forestry Tasmania, the State government and the State parliament all regard the special timbers industry as a taxpayer-funded community service and political play-thing rather than a commercial opportunity, then blackwood’s commercial future remains difficult.

“The lack of price transparency for forest products, particularly from hardwood forests/plantations [in Australia], represents an impediment to the uptake of farm forestry. Unlike other commodities, price information for forest products is not published through the newspaper or accessible online. Better price transparency is required to encourage smallscale investment in trees” (p. 71. FWPA Report PN: PNA243-1112/2, 2013).

http://www.fwpa.com.au/rd-and-e/market-access/229-the-case-for-renewed-development-in-plantations-identifying-forest-values-and-the-constraints-to-attainment-stage-one-and-two.html

This quote from a recent forest industry report says it all. Even the forest industry recognises price transparency is a major issue, but then does nothing about it. One of the authors of this report was none other than the Director of Forestry Tasmania!

For previous years IST tender reviews see:

https://blackwoodgrowers.com.au/2016/06/23/ist-blackwood-log-tender-results-2015-16/

https://blackwoodgrowers.com.au/2015/06/18/ist-blackwood-sawlog-tender-results-2014-15/

https://blackwoodgrowers.com.au/2014/06/14/blackwood-sawlog-tender-results-2013-14/

 

Special Timbers in Western Australia

FPCSTA

Forest Products Commission (FPC) of Western Australia (the Government forest agency) puts all special timbers that come from Crown land and State forest to public auction. The objective is not for the Forest Products Commission to maximise revenue (unfortunately that is not one of their corporate objectives), but to be impartial in terms of who gets access to the limited resource, and attempt to ensure some kind of fair market price is paid. I’m guessing much of this because the FPC actually tells us very little about their special timbers operations.

http://www.fpc.wa.gov.au/timberauctions

http://www.fpc.wa.gov.au/speciality-timbers-go-under-hammer

There are generally four auctions per year, the first for 2017 is this Saturday the 6th of May. Over 100 lots are to be auctioned this Saturday totalling over 1,000 tonnes of specialty woods.

Here’s the auctioneers website:

https://www.auctions.com.au/auctions/2017/05/06/wa-log-burl-burl-slices-craft-packs-and-slabs-auction.html

Western Australia doesn’t have a Special Timbers Management Plan. Whatever wood is salvaged from other activities on Crown Land and State forest is what special timbers are available and that’s it.

There are no taxpayer subsidies (that I can see anyway) and no logging of parks and reserves just to pander to the wood craft people.

In 2016 FPC auctioned approximately 3000 tonnes (approx. 3,000 cubic metres) of specialty timbers. That’s 150 truckloads of specialty timbers. Compare that with just 200 cubic metres tendered by Island Specialty Timbers/Forestry Tasmania last year.

The FPC is reluctant to talk about their specialty timbers operations, apart from announcing the auction dates. Here is the sum total of what the last FPC Annual Report had to say:

Local buyers bid keenly for a variety of Goldfields timbers for musical instruments, wood turning projects and unique pieces of furniture. Wood from this region is difficult to access, and bidders at the auction were impressed by the bold colours and patterns found in the timber.

Also on offer was a selection of South West native forest specialty feature timbers including marri, blackbutt and sheoak.

That’s it!!

Just some motherhood statements!!

No discussion about sales highlights, market conditions, total volume sold or total revenue.

If the FPC wanted to engage with stakeholders and the general public this would be a great opportunity. Apparently not!!

Like Forestry Tasmania the Forest Products Commission is not run as a commercial business but as a community service to achieve political objectives. Being a profitable tree grower is not the vision of either of these public forest managers.

Remember the only basis for a successful forest industry is profitable tree growers and public auctions are a great way to maximise profitability and create greater market transparency.

Island Specialty Timbers Tender Results

ist

http://www.islandspecialtytimbers.com.au

For the past three years I’ve been collecting, analysing and reporting blackwood log tender results from Island Specialty Timbers (IST) as, despite the miniscule volumes and generally poor quality, these are the only competitive blackwood log prices that are publically available.

Just for the fun of it I thought I would start collecting and analysing all the tender results. You never know what might turn up!

This data doesn’t have much market value. Besides blackwood, 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.

The best value this data has is to show what the marketplace might pay for premium quality timber. When Tasmanian public native forest oldgrowth and rainforest timbers are no longer available, will the marketplace come to better appreciate farm-grown Tasmanian blackwood?

Forestry Tasmania and the Tasmanian Government consider the management and harvesting of public native forest specialty timbers (including blackwood) as a taxpayer funded community service. So why does Forestry Tasmania/IST put these tiny volumes to tender and publish the results? What is the point?

Forestry Tasmania’s major product Tasmanian Oak has no price or market transparency. Why the need for competitive markets and price transparency for community-service specialty timbers, where there is no competitive markets and price transparency for eucalypt hardwood? It makes no sense!

IST was established ”to increase the recovery, availability and value of specialty timbers from harvesting activities in [Tasmanian] State forests”. Does IST achieve its stated objectives? Does it operate at a profit? We will never know!

Island Specialty Timbers has been operating for 25 years. In that time it has never produced a market report; and only in the last 3 years has Forestry Tasmania included IST sales highlights in its Annual Report.

http://www.forestrytas.com.au/about-us/publications

So far as I’m aware these are the only publically available competitive market log price results available anywhere in Australia!

30 million cubic metres of wood is harvested in Australia every year and all we have are competitive price results for less than 200 cubic metres! Isn’t that extraordinary??

Does the forest industry really want to encourage investment?

isttender-chart

The size and quality of products tendered by IST varies enormously so it is difficult to draw conclusions from these results.

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

All up over the 15 months 210 cubic metres of logs were sold by tender with total revenue of $162,000. An additional $18,100 revenue was received by Forestry Tasmania directly from Tasmanian taxpayers to compensate for the costs of harvesting this 210 cubic metres.

87 cubic metres remained unsold from the tender process. Few of the logs tendered were of premium (Category 4) grade, most of which are sold under private long term sales agreements, including virtually all of the Huon pine.

Five species attract strong demand and high prices, these being black heart sassafras, plain white sassafras, king-billy and huon pine and leatherwood with average log prices over $1,000 per cubic metre. Celery top pine sold for an average price of $530 per cubic metre. All of these species take 400-1,000 years to reach maturity so I suspect even these prices are cheap.

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/

Black heart sassafras and blackwood made up 25% each of the successful tendered volume over this 15 month period, but made up 46% and 6% of the sales revenue respectively. Blackwood comprised 55% of unsold log volume, perhaps suggesting that the local Tasmanian market for plain grain blackwood is saturated. This is not surprising given you can buy plain grain select blackwood timber in Tasmania for the same price as Radiata pine.

https://blackwoodgrowers.com.au/2016/11/12/blackwood-timber-price-list-summary-2016/

The harvesting of specialty timbers from Tasmanian public native forests is neither profitable nor sustainable.

I will provide an update on IST tender results every six months.