Since December 2015, the sector has enjoyed a much overdue boost from the trifecta, while there are only weak signs of any change on the horizon.
Southern Wood Council chairman, and City Forests chief executive Grant Dodson said the 18 months had been ''unprecedented'' for the sector, with strong demand for both log exports and sawn timber for the domestic housing market.
''It's still a very strong Chinese market.
''It's been an unprecedented period of stability and pricing, going back to December 2015,'' Mr Dodson said.
Exports of log, wood and wood articles had increased 15% to $4.14billion in the year ended March, according to AgriHQ's monthly survey of exporters, forest owners and saw millers.
AgriHQ analyst Reece Brick said New Zealand export log prices generally rose this month, as key fundamentals moved in the country's favour.
''Prices lifted through all unpruned export log grades this month, while pruned logs experienced some minor weakness,'' he said in his report.
The southern export demand is borne out in figures released by Port Otago.
Port Otago's operations manager Peter Brown was contacted, and said the volume of logs across Port Chalmers wharf this financial year would be a record.
The previous record was 840,000cu m in 2015. The projected volume for full year 2017 was expected to be around 900,000cum to 950,000cum, he said.
''However, that depends on the shipping profile between now and end of June,'' Mr Brown said yesterday.
Mr Dodson agreed that while there had been rising concerns about the level of inventory being held in China, since the Chinese New Year the level of inventory had declined from about 5million cum to 4million.
China traditionally uses New Zealand logs for its industrial sector, furniture and fitting out of its residential apartment blocks.
However, rising awareness of environmental issues in China, generally around the state of lakes, dams and rivers, had meant China was not harvesting its own forests at present.
''That's also helping to drive demand out of New Zealand,'' Mr Dodson said.
During the past eight weeks, Mr Dodson said, China's uptake of logs from its wharves was averaging around 70,000cum to 80,000cum per day; meaning those logs had been removed from inventories.
While conceding shipping costs were coming off historic lows, Mr Dodson said other elements of the trifecta meant exporting ''was still favourable'' for the time being.
Mr Brick said shipping rates advanced by a small margin but appear to have plateaued and may ease in coming months, exchange rates had moved in exporters' favour, and demand from overseas markets was good across the board.
Demand from China was positive and imports of New Zealand softwood logs were up by 25% in the first quarter of this year, compared with the same period last year.
''China is still displaying very good interest in logs, as it has throughout this year so far,'' Mr Brick said.
''Chinese log imports are tracking at quite a high level. Thankfully, this has been matched by an equivalent lift in off-take at ports, which has prevented log inventories from ballooning out and subsequently impacting on pricing,'' he said.
Mr Dodson said demand from local sawmillers had been good, most of the major companies in the southern region having upgraded their facilities in the past 18 months.
City Forests sells 45% of its logs to the domestic market and 55% are exported.
''It's been fuelled by a strong home building market, but also some opportunities to export sawn timber,'' Mr Dodson said.
''The indications are conditions will continue to be be favourable for the rest of the year, if there remains a stable [global] political climate,'' he said.
Mr Dodson said he expected it to be ''one of our better years for log sales''.
However, while City Forests was cutting forests at the top end of its sustainable level, it would not be a record year for volume, but it would be a ''good year'' for productivity, he said.
Mr Brick said there was little to suggest either the export or local log markets would suffer from any significant weakness in the future.
In the domestic log market, he said ''all demand fundamentals remain well placed, and it's difficult to imagine a scenario where they'd move away from their current path''.
Forest products are New Zealand's third-largest commodity export sector behind dairy and meat products.
- Additional reporting by BusinessDesk
