On the day China confirmed it had lifted its ban on Australian timber imports, the share worth of Australia’s largest woodchip exporter was beginning to fall.
Key factors:
- Halfway Restricted has operations in QLD, VIC, TAS and the NT.
- The corporate’s share worth dropped 11 per cent on account of demand points in China
- China has this week lifted its ban on imported Australian logs
Shares in Halfway Restricted dropped 11 per cent on Thursday and fell an additional 7.5 per cent on Friday to complete the week at $0.74 a share.
The rationale was China, however not due to any commerce frictions, however due to provide and demand.
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China’s paper pile
China initially suspended the commerce of timber logs in 2020, citing quarantine risks.
The ban by no means included Australia’s woodchip exports and China, being the world’s largest producer of paper, has lengthy been a significant buyer of Australia’s woodfibre.
However in its replace to the ASX, Halfway disclosed there had been an growing backlog of pulp and paper shares at Chinese language ports on account of “depressed world buying and selling exercise”.
“In consequence, pulp costs have continued to fall and Chinese language pulp producers have additional slowed woodfibre purchases,” it stated.
“Hardwood pulp is at the moment buying and selling at round $US465 a tonne, down from a peak of greater than $US855 a tonne earlier within the calendar 12 months.”
Halfway stated considered one of its main prospects in China had suggested the corporate that it didn’t intend to take quantity from Halfway “in accordance with the mutually agreed delivery schedule for the second half of economic 12 months 2023”.
“4 vessels that have been within the agreed schedule could also be impacted and the timing of those vessels stays unsure,” it stated.
Halfway stated the market slowdown may lead to its export volumes falling within the second half of FY23 by 35 per cent.
“The slowdown can also be more likely to result in higher-than-normal stock ranges on the finish of the monetary 12 months,” it stated.
The corporate runs timber initiatives in Queensland, Victoria, Tasmania and the Northern Territory.
Halfway’s main prospects have lengthy been China and Japan, however this 12 months it has resumed woodchip exports to Indonesia.
In response to knowledge from the Federal Division of Agriculture, Australia exported $1.3 billion value of woodchips in 2022.
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