Australian Sawmills Started Losing Ground to Imports Once Supply Hit Ceiling
Overseas suppliers met 83 per cent of the extra framing demand when house starts rose, with log shortages and tight mill capacity holding local output back, forestry consultant Steve Walker found.
Low-grade KIS radiata logs from New Zealand, tagged at a log yard in China, are one of two main feedstocks for the E10 LVL shipped to Australia, with virtually no other market at scale, according to Steve Walker. (Photo Credit: Supplied to Wood Central / Central PR Group for one time use)
Framing timber has cost Australian builders more whether housing booms or slumps, with a new analysis from forestry consultancy Terrafolia Advisory revealing structural pine prices jumped 34 per cent in 2021-22 even as domestic output fell. That is according to Steve Walker, the consultancy’s managing director and a former chief operating officer of HQPlantations, who released the report on Monday.
“Since about 2015, Australian sawn softwood has depended on housing, but housing has not depended on Australian sawn softwood,” Walker wrote.
Domestic supply “hit a ceiling around 2015”, Walker found, and output has since risen just 0.8 per cent in years when house starts climbed an average 15.4 per cent. Imports met 83 per cent of the extra demand in those years, and whilst a slump still “reliably costs Australian mills volume”, he wrote, “a housing boom no longer adds it”.
By contrast, imports met just 12 per cent of the extra demand in upswings before 2015, when domestic output rose 6.8 per cent in years house starts climbed 8 per cent. The import share has held above 10 per cent of the market ever since spiking to 21.8 per cent in 2021-22.
Two 3D pie charts of Australian sawn softwood consumption, with net imports rising from 8.5 to 11.3 per cent.
Prices then held near their 2021-22 peak through the 2022 to 2024 downturn, even though domestic output dropped another 9 per cent. Walker put much of that down to structural constraints rather than an industry-wide choice, with fire and cyclone-salvage logs running out in NSW and Queensland after 2020-21.
The analysis is based entirely on public data published by ABARES and the Australian Bureau of Statistics (ABS). Industry-level data cannot show whether any single business could have produced more or priced differently, he said, and his analysis makes no such suggestion.
Even so, structural pine prices held 40 per cent above their 2019-20 level through the downturn, Walker estimates, which has drawn in suppliers from New Zealand, Europe, and Asia.
Those suppliers need not undercut the local market to win business, he said, with landed prices pitched close to the $640 a cubic metre untreated MGP10 fetches at home. It comes as China led a record year for LVL imports, with 254,065 cubic metres shipped into Australia last financial year, up from 95,919 cubic metres in 2022-23.
A growing part of that trade is E10, a framing-size LVL that merchants now sell as an alternative to MGP10 pine because the two share the same stiffness rating. Matching stiffness does not guarantee matching strength, Walker warned, and any substitution should rest on each product’s certified design data.
Frame and truss plants running automated lines value E10 for its “straightness, length and consistency”, Walker wrote. Once a plant re-tools around it, he said, that volume will not automatically return to sawn pine if prices ease.
A worker beside logs being cut to length on a processing line in a Chinese mill. (Photo Credit: Supplied to Wood Central / Central PR Group for one time use)
An import priced under the Australian market is not dumped for that reason alone, Walker said, and his analysis neither proves nor rules out the dumping concerns raised over Chinese LVL this year. His firm advises timber processing and LVL businesses, and he sees compliance among some traders and suppliers as the more pressing issue.
Major LVL manufacturers supplying Australia share those concerns, according to Walker, who favours targeted enforcement against non-compliant supply over broad trade remedies. Wood Central has sought comment from the Australian Timber Importers Federation on the findings.
Processing capacity, not logs, is the constraint in Tasmania, Walker found, where only 11 per cent of the softwood harvest becomes sawn timber compared with 23 per cent on the mainland. The state’s harvest grew by 43 per cent over the decade to 2024-25, but the extra wood went to pulp and exports rather than to house framing.
“The challenge isn’t to resist international competition, but to learn from the world’s most progressive forest products supply chains, understand what makes them competitive, and adapt those lessons at home,” Walker told Wood Central.
For Walker, the opportunity lies in “Australian investment in scale and engineered wood”. Europe’s and North America’s leading mills cut up to 2 million cubic metres of logs a year at one site, as much as four times the intake at Hyne’s Tumbarumba mill in NSW.
Only a handful of Australian regions, the Green Triangle and Gippsland among them, could supply a mill that size with logs from within 150 kilometres, he said. In smaller catchments, Walker favours mills sized to the local resource that add value through beams, glulam, CLT, and finger-jointed studs rather than more commodity E10.
Steve Walker inspecting LVL panels at a mill in Shuyang, China. (Photo Credit: Supplied to Wood Central / Central PR Group for one time use)
As it stands, Walker sees the housing upswing now underway as the real test, with Queensland house starts at record levels after a 29 per cent rise since mid-2023. The task, he wrote, is “to make Australian timber the first choice again as housing grows”.
The issue runs deeper than market share, according to Walker. “As foresters, we are custodians of one of Australia’s most important sovereign assets, its plantation forests,” he told Wood Central. “These are investments made over generations, and our responsibility extends well beyond the forest gate.”
“We have the resource, the expertise and the opportunity,” he said. “We need to invest in the processing capability, technology and innovation to compete head-on, capture more value in Australia and ensure our plantation forests underpin the next generation of Australian manufacturing.”
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