Category Archives: Island Specialty Timbers

It’s that time of the year again! Time to present my annual summary of competitive blackwood log prices from the Island Specialty Timber log tenders.

https://www.islandspecialtytimbers.com.au/

Island Specialty Timbers is the only source of competitive, transparent log prices anywhere in Australia, including blackwood sawlog prices. That simple statement tells us a great deal about the dire condition of the forest industry!

The lack of commercial credibility is just one of the many challenges facing the forest industry in Australia.

IST is a business enterprise of Sustainable Timber Tasmania (STT) which sources and retails raw material of Tasmanian specialty timbers from harvest or salvage operations conducted on State owned Permanent Timber Production Zone land (PTPZl).

IST is not really a “business” just as the State forest agency Sustainable Timber Tasmania is not a business either. Logging of public native forest in Tasmania requires significant taxpayer subsidies every year.

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

You can read my previous annual tender summaries here:

https://blackwoodgrowers.com.au/?s=tender

IST conducted 7 tenders during the year with a total of 198 cubic metres of special species sawlog and craftwood put to public tender. Tasmania defines “special species” as any native forest timber apart from plain grain Tasmanian oak (Eucalyptus sp.).

Blackwood Results

Following two years of strong price increases for plain grain blackwood logs, this year saw a softening of markets. Maximum, minimum and average log prices all declined in 2022-23.

IST put a mere 16 plain grain blackwood logs to tender totalling 11.5 cubic metres. Three logs totalling 1.8 cubic metres were unsold at tender. Prices ranged from $150 to $800 per cubic metre with an average price of $518.

One possible explanation for the softer prices was the significant drop in log size from previous years. Smaller logs mean less sawn recovery per log volume so lower prices.

One figured grain blackwood log (1.6 cubic metres) was sold at tender for a $800/m3.

Generally ~9,000 cubic metres of blackwood is harvested annually from Tasmania’s public native forests with 99.99% being sold at heavily discounted Government prices on long term sales contracts.

The Tasmanian government dominates and deliberately undermines the blackwood log and timber market. These log tender results need to be interpreted bearing this fact in mind.

Premium plain grain sawlogs are what can be grown in blackwood plantations. The “target” sawlog in a blackwood plantation is 1.5 cubic metres in volume.

General Results

Overall a total of 198 cubic metres of special species sawlog and craftwood were put to public tender during the year. Forty five cubic metres failed to sell at tender, a significant increase over the last few years.

Apart from the June 2023 tender that contained a large volume of Huon pine material, 2022-23 continued the trend from last year of declining average prices.

Total tender revenue for 2022-23 was only $97,400 which is a significant drop from last year, and the result of the combined lower volumes and lower prices.

It’s a good thing Island Specialty Timbers is not run as a business otherwise they would be calling in the receivers. Just more taxpayer-funded welfare for the woodcraft industry.

The one positive result for the year was a record price paid for a Tasmanian special timbers log. The June 2023 tender saw a Huon pine log (66cm LED, 47cm SED, 2.4m length, 0.41 cubic metres volume) sell for $7,675 per cubic metre. This continues the trend of the past five years of ever increasing maximum prices paid for quality premium timber.

After a year 2020-21 where average log size increased, the last 2 years have seen a resumption of falling log size at the IST tenders.

Remember these IST tender sales represent tiny log volumes sold into the small southern Tasmanian market. They represent mill door prices not stumpages.

The following chart shows the volume and price summary for 64 log tenders back to 2015.

The tiny volumes and wide variability in species and quality of logs that IST put to tender makes assessing market trends over time difficult.

The following chart shows that average log size at the IST tenders continues to be very small. Extracting value out of these small logs must present quite a challenge for the buyers.

With Tasmania and New South Wales being the only States that have not committed to closing down public native forestry, the future of Island Specialty Timbers is now very much on borrowed time.

I won’t be writing these annual reports for much longer!

This is my annual summary of Island Specialty Timbers (IST) log tender results.

Island Specialty Timbers is the only source of competitive, transparent log prices anywhere in Australia, including blackwood sawlog prices.

That simple statement tells us a great deal about the dire condition of the forest industry in Australia.

https://www.islandspecialtytimbers.com.au/

IST is a business enterprise of Sustainable Timber Tasmania (STT) which sources and retails raw material of Tasmanian specialty timbers from harvest or salvage operations conducted on State owned Permanent Timber Production Zone land (PTPZl).

IST is not really a “business” just as the State forest agency Sustainable Timber Tasmania is not a business either. Logging of public native forest in Tasmania requires significant taxpayer subsidies every year.

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

You can read my previous annual tender summaries here:

https://blackwoodgrowers.com.au/?s=tender

IST conducted 10 log tenders during the year with 286 cubic metres of special species logs put to public tender.  Tasmania defines “special species” as any native forest timber apart from plain grain Tasmanian oak.

Blackwood Results

This is the important bit……

2022 was another champagne year for blackwood, continuing the strong market demand and prices from 2021.

2021 was the year that plain-grain blackwood sawlog broke the $1,000 per cubic metre price barrier. 2022 continued that trend with a record price of $1,150 per cubic metre.

The chart below shows blackwood sales results for the year.

A total of 15 blackwood logs (21.7 cubic metres) were put to tender this year, all of it plain grain. All logs were sold, for an average price of $643 per cubic metre, or a total of $13,950. Average log volume was 1.45 cubic metres – a good size sawlog!

A stand-out result for the year was a massive 2.46 cubic metre blackwood log that sold for $925 per cubic metre, with a total price of $2,276!

The above chart shows a return to strong demand and strong prices for quality plain grain blackwood sawlogs following the pandemic year of 2019-20, with maximum and average prices showing strong increases.

This is the greatest volume of blackwood that IST has put to tender for quite some time, despite the fact that blackwood makes up more than 90% of special species harvested from public native forest in Tasmania. Generally ~9,000 cubic metres of blackwood is harvested annually with 99.999% being sold at heavily discounted Government prices on long term sales contracts.

The Tasmanian government dominates and undermines the blackwood log and timber market. These log tender results need to be interpreted bearing this fact in mind.

Premium plain grain sawlogs are what can be grown in blackwood plantations.

Will this result capture the attention and imagination of Tasmanian farmers?

The following chart shows the average size characteristics of plain grain blackwood logs sold at IST tender. The target sawlog from a blackwood plantation has a volume of 1.5 cubic metres and a small end diameter (SED) of around 50 cm.

Remember these IST tender sales represent tiny log volumes sold into the small southern Tasmanian market. They represent mill door prices not stumpages.

Imagine if IST put 10 cubic metres of blackwood sawlog at each tender (100 cubic metres per year) to attract mainland and maybe even overseas buyers.

Imagine if State government forest policy was about profitable tree growers and not sawmill welfare.

Imagine what that change would do for the forest industry and Tasmanian farmers!

These positive blackwood log market signals should be resulting in more blackwood plantations being established, helping to build the industry and make Tasmanian farmers more profitable.

One hectare of well managed blackwood plantation has the potential to produce approx 300 cubic metres of premium sawlog after 30 – 35 years. At $1,000 per cubic metre that equates to $300,000 per ha in todays market.

General Results

Overall IST put 286 cubic metres of specialty timbers to tender in 2021-22 of which 13.8 cubic metres was not sold. Total tender revenue was $230,400.

Last year Sustainable Timbers Tasmania sold 8,825 cubic metres of specialty timbers, so these competitive tender sales represent a mere 3% of specialty timber sales from public native forests in Tasmania.

https://www.sttas.com.au/

With the exception of the July 2021 and May 2022 tenders, the tender results were poor with maximum and average prices well down on previous years (see chart below).

The July 2021 tender was dominated by Black heart sassafras logs which generally attract high prices, whilst the May 2022 tender was dominated by Black heart sassafras, Tiger myrtle and figured Huon pine, all of which are premium species attracting premium prices. These tender results show that the market is still prepared to pay premium prices for rare, quality logs.

It was at the latter tender that a new record IST tender price was set for a special species sawlog. This log was a 0.94 cubic metre Tiger myrtle log that sold for $6,100 per cubic metre, total price $5,734!

The following chart shows the volume and price summary for 57 log tenders back to 2015.

The tiny volumes and wide variability in species and quality of logs that IST put to tender makes assessing market trends over time difficult.

The next chart shows the average volume of the sold logs. Here there is a clear trend of diminishing log size. If it wasn’t for the occasional large eucalypt log IST throws into the tender mix, this trend of diminishing log size would be even more pronounced. The last 12 months shows a steady decline in log size so it is not surprising that prices have reflected a general decline in log quality.

The following 2 charts show the above data summarised by year:

Continuing the trend from last year 2021-22 saw a “significant” volume of specialty species logs put to tender. Despite the higher volumes, average prices have declined, probably in part due to declining log quality.

The average price for all species put to tender in 2022 was $844 per cubic metre, well down from $1,043 per cubic metre in 2021.

The above chart shows a steady rise over the last 4 years in the maximum price paid for these dwindling ancient timber resources, whilst average and minimum prices remain relatively steady.

The main focus of IST tenders is black heart sassafras (Atherosperma moschatum) which can command very high prices for good logs. It made up 35% of log volume put to tender in 2022.

https://en.wikipedia.org/wiki/Atherosperma

However the tree is slow growing (500+ years to reach commercial size) and is restricted to rainforest and old growth eucalypt forest, so supplies of this species are dwindling.

Blackwood made up just 8% of the volume IST put to tender.

Unfortunately the marketplace continues to show strong support for the plundering of the last of Tasmania’s ancient forests!

Island Specialty Timbers (IST), the only source of competitive, transparent market blackwood log prices, conducted 10 log tenders during the year, making up for the shortfall last year due to the pandemic.

https://www.islandspecialtytimbers.com.au/

IST is a business enterprise of Sustainable Timber Tasmania (STT) which sources and retails raw material of Tasmanian specialty timbers from harvest or salvage operations conducted on State owned Permanent Timber Production Zone land (PTPZl).

You can read my previous annual tender summaries here:

https://blackwoodgrowers.com.au/?s=tender

Blackwood Results

2021 was a champagne year for blackwood!

2021 was the year that plain-grain blackwood sawlog broke the $1,000 per cubic metre price barrier!

Prices for good quality plain grain blackwood sawlogs have been sitting above $800 per cubic metres for the last few years, as seen in the chart below, but this year they broke through the price ceiling.

Premium plain grain sawlogs are what can be grown in blackwood plantations.

Will this result encourage Sustainable Timbers Tasmania/IST to put more blackwood sawlogs to tender?

Will this result capture the attention and imagination of Tasmanian farmers?

This year IST put 10 blackwood logs to tender, a total of 11.9 cubic metres, or 4.4% of the total volume put to tender for the year.

One log was unsold at tender, as was a 2 cubic metre pack of sawn blackwood boards.

Two logs had feature grain and sold between $1,250 and $1,300 per cubic metre.

The other 7 logs were plain grain, with prices ranging from $300 to $1,100 per cubic metre. Lower prices were paid for smaller logs and logs with defects (spiral grain, scars, branch knots).

Higher prices were paid for large, good quality logs.

All up the 8.14 cubic metres of plain grain blackwood logs sold for $4,259.

The following chart shows the average size characteristics of sold plain grain blackwood logs. The target sawlog for a blackwood plantation has a volume of 1.5 cubic metres and a small end diameter (SED) of around 50 cm.

Remember these are tiny log volumes sold into the small southern Tasmanian market. They represent mill door prices not stumpages.

As usual IST has a policy of minimising the amount of blackwood logs it puts to tender, despite the fact that around 10,000 cubic metres of blackwood are harvested from public native forests in Tasmania each year, and sold at “Government prices”.

Imagine if IST put 10 cubic metres of blackwood sawlog at each tender, to attract mainland and maybe even overseas buyers.

Imagine if Government forest policy was about profitable tree growers and not sawmill welfare.

Imagine what that change would do for the forest industry and Tasmania!

These positive blackwood log price signals should be resulting in more blackwood plantations being established, helping to build the industry and make Tasmanian farmers more profitable.

One hectare of well managed blackwood plantation has the potential to produce approx 300 cubic metres of premium sawlog after 30 – 35 years. At $1,000 per cubic metre that equates to $300,000 per ha in todays market.

How many Tasmanian farms have difficult corners, steep slopes and weedy areas that could be more productive growing quality wood?

General Results

Overall IST put 272 cubic metres of specialty timbers to tender in 2020-21 of which 252 cubic metres sold for total revenue of $262,700.

Last year Sustainable Timbers Tasmania sold 7,921 cubic metres of specialty timbers, so these competitive tender sales represent a mere 3% of specialty timber sales from public native forests in Tasmania.

The following chart shows the volume and price summary for all log tenders back to 2015. The price spike in the January 2021 tender was due to this tender being an all Huon pine (Lagarostrobos franklinii) tender.

The tiny volumes and wide variability in species and quality of logs that IST put to tender makes assessing trends over time difficult.

The next chart shows the average volume of the sold logs. Here there is a clear trend of diminishing log size. If it wasn’t for the occasional large eucalypt log IST throws into the tender mix, this trend of diminishing log size would be even more pronounced.

The following 2 charts show the above data summarised by year:

2020-21 was significant for a) the major increase in volume of specialty timbers put to tender, and b) a record unit price set for a single log at IST.

The record unit price of $5,300 per cubic metre was for a Black heart sassafras log at the March 2021 tender. The log was only 2.5 metres long with a volume of only 0.16 cubic metres, so total price was only $850!!

The highest price paid for a single log was at the same March 2021 tender where another Black heart sassafras log of 1.3 cubic metres sold for $5,570.

The main focus of IST tenders is black heart sassafras (Atherosperma moschatum) which can command very high prices for good logs.

https://en.wikipedia.org/wiki/Atherosperma

However the tree is slow growing (500+ years to reach commercial size) and is restricted to rainforest and old growth eucalypt forest, so supplies of this species are dwindling.

Surprisingly the marketplace continues to support the plundering of Tasmania’s last ancient forests!

Five Year Review

Again it is important to recognise that this data represents tiny volumes sold into the small southern Tasmanian market. The results DO NOT represent the wider Tasmanian, Australian or international markets.

The results are also influenced by the fact that IST is NOT a commercial business. Like its parent Sustainable Timbers Tasmania, IST is NOT obliged to make a profit. These rare timber resources are brought to market at taxpayer expense.

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

Looking at the annual aggregate results of the IST tenders three trends are apparent:

1. the maximum price paid for quality wood is increasing; and
2. the volume unsold at tender is decreasing. Whether this is due to a) IST becoming better at excluding logs that will not sell, and/or b) increasing demand for quality wood, is unclear. The fact that both the average and minimum prices paid remain steady indicates better log selection rather than increasing demand. Certainly the quality of product put to tender by IST varies enormously.
3. the average price paid for quality wood has not changed over the last 5 years, remaining at around $1,000 per cubic metre.

The 7-year trend for plain grain blackwood logs is less clear, but the volumes are microscopic!

In general the prices paid for plain grain blackwood logs have been good, with indications in the last few years of solid price increases.

Since blackwood is the only Tasmanian specialty timber species that can be grown in commercial plantations, this is good news!

Will the Government and the forest industry make use of this valuable positive market information?

Almost certainly not!

Well I’m sure we can all agree. It definitely hasn’t been your average year!

Island Specialty Timbers (IST), the only source of open, competitive, transparent market blackwood log prices, managed to conduct 6 log tenders during the year. A normal year would see 8-9 log tenders.

https://www.islandspecialtytimbers.com.au/

IST is a business enterprise of Sustainable Timber Tasmania (STT) which sources and retails raw material of Tasmanian specialty timbers from harvest or salvage operations conducted on State owned Permanent Timber Production Zone land (PTPZl).

You can read my previous annual tender summaries here:

https://blackwoodgrowers.com.au/?s=tender

 

Blackwood Results

Despite the fact that blackwood is by far the most common specialty wood in Tasmania, IST insists on restricting tender sales of blackwood. Only 3 blackwood logs were put to tender this year in 2 of the 6 tenders; 3 logs out of a total of 194 logs put to tender!

That’s pretty pathetic!!

Tasmanian blackwood is the only specialty timber species that can be grown in commercial plantations. Having a plentiful supply of market information might actually stimulate investment in tree growing in Tasmania, but IST/STT and the Tasmanian Government are determined to prevent any useful market information being available.

IST/STT and the Tasmanian Government continue to support Welfare Forestry in Tasmania, instead of promoting a profitable commercial forest industry.

All 3 blackwood logs put to tender sold, 1 log had figured grain, the other 2 logs were plain grain.

All 3 logs were of good size and reasonable quality.

The figured grain blackwood log sold for $825/m3, total price $982.

The 2 plain grain blackwood logs sold for $400-$450/m3, total prices $468-$774.

The following chart shows the volume and price data for the last 6+ years for plain grain blackwood logs. Having enjoyed 4 years of steadily improving prices this year showed a subdued market.

These logs are sold into the small local Tasmanian market which restricts prices somewhat.

These prices are effectively mill door delivered, not stumpage prices.

The following chart shows the range in size of the sold plain grain blackwood logs.

A target plantation grown blackwood log has a volume of 1.5 cubic metres and a small end diameter (SED) of approx. 50 cm.

General Results

Overall IST put 112 cubic metres of specialty timbers to tender in 2019-20 of which 97 cubic metres sold for total revenue of $94,200.

Last year Sustainable Timbers Tasmania sold 9,747 cubic metres of specialty timbers, so these competitive tender sales represent a mere 1% of specialty timber sales from public forests in Tasmania.

The following chart shows the volume and price summary for all tenders back to 2015.

 

The tiny volumes and wide variability in species and quality of logs that IST put to tender makes assessing trends over time difficult.

The next chart shows the average volume of the sold logs. Here there is a clear trend of diminishing log size. If it wasn’t for the occasional large eucalypt log IST throws into the tender mix, this trend of diminishing log size would be even more evident.

The following 2 charts show the above data summarised by year:

What remains apparent is that the market continues to pay high prices for quality timber.

The main focus of IST tenders is black heart sassafras (Atherosperma moschatum) which can command very high prices for good logs.

https://en.wikipedia.org/wiki/Atherosperma

However the tree is slow growing (500+ years to reach commercial size) and is restricted to rainforest and old growth eucalypt forest, so supplies of this species are dwindling.

Surprisingly the marketplace continues to support the plundering of Tasmania’s last ancient forests!

For 2019-20 black heart sassafras made up 37% of sold volume and 52% of tender revenue, whilst eucalypt feature grain logs made up 22% of sold volume and 9% of tender revenue.

6.7 cubic metres of celery top pine logs (Phyllocladus aspleniifolius) were sold at an average price of $1,050 per cubic metre.

Overall highlights for the year were $4,975 per cubic metre paid for a small musk (Olearia argophylla) log; whilst a total price of $2,933 was paid for a medium sized black heart sassafras log.