New Zealand timber industry in turmoil as heavy dependence on China backfires

Posted on May 20, 2025   |  

A crash in China’s construction industry is significantly affecting New Zealand’s timber trade.

China was the largest importer of New Zealand logs, accounting for 92% of exports in the year ending June last year.

Most New Zealand timber exported to China is used for concrete casting (boxing) and is involved in about 60% of China’s multi-story building projects.

Since 2019, New Zealand log prices have sometimes dropped below $100 per cubic meter, down from an average of $132.

Lower prices have made harvesting uneconomical for many small forest owners, leading to closures due to low domestic demand.

Property investment in China fell 10.2% during the first seven months of 2024.

Although October data showed a slight improvement in housing sentiment, real estate investment and new builds dropped at their fastest year-on-year pace.

The decline in China’s property sector has weakened related industries like construction and furniture-making, which import New Zealand logs and wood products.

This has reduced demand and lowered global prices for New Zealand logs.

China’s total log imports dropped 36% from 2021 to 2023, falling from NZ$16.4 billion to NZ$10.3 billion.

While China isn’t a large market for New Zealand-sawn timber, the industry is concerned about potential US tariffs.

The New Zealand Timber Industry Federation CEO said US tariffs on New Zealand-sawn timber exports are expected later this year.

Exports of sawn timber to China increased from 210,000 to 250,000 cubic meters for the year ending December, with prices around $331 per cubic meter.