How global markets help meet demand for structural sawnwood in Australia
Australia’s forest and wood products market is tightly linked to residential construction. During periods of heightened construction activity and demand for structural sawnwood, domestic production is supplemented by supply from overseas. The ability of Australian consumers to use imports to balance demand swings and insulate against price effects is expected to continue. Strong aggregate international log availability and continued technological innovation suggest that Australia has a well-diversified portfolio of supply of structural sawnwood products to meet growing domestic demand.
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Overview
Majority of Australia’s forestry sector output is directed to construction activity. Residential construction activity is the main driver of demand for structural sawnwood, which is used in house framing and trusses. Understanding the structural sawnwood market is important as it directly affects confidence in this foundational building product for Australian homes.
Key findings
- Australia’s apparent consumption of structural softwood sawnwood reflects building activity, where stable domestic supply from softwood plantations is supplemented by opportunistic imports.
- During peaks in housing demand imports of structural sawnwood rise temporarily and then fall once demand returns to normal levels. This was demonstrated between 2020-21 and 2021-22, when Australia used sawnwood imports to balance the short-term demand spike amid the COVID-19 stimulus period.
- Having a diversified set of options helps smooth supply shocks from either domestic sources, or any one potential import market, and therefore reduces the risk of extreme domestic price swings for sawnwood.
- Global log availability is expected to be sufficient to meet increasing demand for industrial roundwood through to at least 2050. For Australian consumers this means that global markets can continue to be relied upon to provide a diversified source of sawnwood when required by the domestic market.