Group 1: Report Industry Investment Rating - No information provided Group 2: Core Views of the Report - The log spot price has stabilized due to increased arrivals at ports and inventory accumulation. In the short - term, prices are likely to remain stable under the game of supply and demand, and in the long - term, attention should be paid to the implementation of the expected increase in the FOB price in February and the recovery rhythm of terminal construction demand [1][8] Group 3: Summary by Directory Comprehensive Analysis and Trading Strategies - **Comprehensive Analysis**: On the supply side, New Zealand's shipments decreased due to the Christmas holiday, but the arrival volume of New Zealand logs at 13 Chinese ports was 479,000 cubic meters, a week - on - week increase of 17%. The arrivals in Shandong were concentrated while those in Jiangsu were tight. The January FOB price dropped to $110 per JAS cubic meter, and traders' pre - Spring Festival stockpiling led to good FOB transactions. On the demand side, the demand for construction timber was flat, but the shipments of laminated wood in Shandong were popular. The daily average outbound volume of 13 ports was 56,500 cubic meters, a week - on - week decrease of 3.09%. The capital availability rate of construction sites declined, affecting procurement. The total inventory was 2.67 million cubic meters, a week - on - week increase of 5.12%, with the inventory of radiata pine and North American timber increasing and that of spruce/fir decreasing, and the inventory in core provinces such as Shandong and Jiangsu increasing [7] - **Logic Analysis**: The price of 6 - meter logs in Jiangsu increased by 10 - 20 yuan per cubic meter due to scarce supply. The price of 3.9 - meter radiata pine in Shandong remained at 740 yuan per cubic meter, and the price of 4 - meter radiata pine in Taicang remained at 730 yuan per cubic meter. Although the FOB price dropped by $2, traders' stockpiling demand supported market sentiment. Core supporting factors include increased domestic arrivals, high enthusiasm for traders' pre - Spring Festival stockpiling, and scarce supply of some specifications. Potential pressures include flat demand for construction timber, a decline in the capital availability rate of construction sites, and a slight decrease in the daily average outbound volume [8] - **Strategy**: For unilateral trading, with both supply and demand being weak and cost support, aggressive investors can go long near the previous low. For arbitrage and options, it is recommended to wait and see [9] Core Logic Analysis - The price of 6 - meter logs in Jiangsu increased by 10 - 20 yuan per cubic meter due to scarce supply. The price of 3.9 - meter radiata pine in Shandong remained at 740 yuan per cubic meter, and the price of 4 - meter radiata pine in Taicang remained at 730 yuan per cubic meter. Although the FOB price dropped by $2, traders' stockpiling demand supported market sentiment. Core supporting factors include increased domestic arrivals, high enthusiasm for traders' pre - Spring Festival stockpiling, and scarce supply of some specifications. Potential pressures include flat demand for construction timber, a decline in the capital availability rate of construction sites, and a slight decrease in the daily average outbound volume [8] Weekly Data Tracking - **Log Supply**: In December 2025, about 55 ships departed from New Zealand ports, a month - on - month increase of 6 ships, with a total shipment of about 2.04 million cubic meters, an 8% increase from November. 42 ships were bound for China, with a shipment of about 1.521 million cubic meters, accounting for 75%, a 5% increase from November. From January 3 - 9, 2026, a total of 9 ships (350,000 cubic meters) departed from New Zealand ports, a decrease of 1 ship (10,000 cubic meters) compared to the previous week. Among them, 8 ships (300,000 cubic meters) were directly bound for China, an increase of 2 ships (80,000 cubic meters) compared to the previous week. From January 5 - 11, 2026, 13 ships were expected to arrive at 13 Chinese ports, an 8% increase from the previous week, and the total arrival volume was about 479,000 cubic meters, a 17% increase from the previous week [19] - **Log Inventory**: As of January 2, the total inventory of domestic logs by material was 2.67 million cubic meters, a week - on - week increase of 5.12%. The radiata pine inventory was 2.28 million cubic meters, a week - on - week increase of 5.56%. The North American timber inventory was 100,000 cubic meters, a week - on - week increase of 42.86%. The spruce/fir inventory was 140,000 cubic meters, a week - on - week decrease of 6.67%. The total inventory of 3 ports in Shandong was 1.95 million cubic meters, an increase of 98,000 cubic meters from the previous period, and the total inventory of 3 ports in Jiangsu was 508,756 cubic meters, an increase of 98,000 cubic meters from the previous period [22] - **Log Demand**: As of January 2, the daily average outbound volume of 13 ports was 56,500 cubic meters, a week - on - week decrease of 3.09%. Among them, the daily average total outbound volume of 3 ports in Shandong was 28,900 cubic meters, a week - on - week increase of 3.58%, and the daily average total outbound volume of 3 ports in Jiangsu was 21,700 cubic meters, a week - on - week decrease of 11.07%. As of January 6, the capital availability rate of sample construction sites was 59.53%, a week - on - week decrease of 0.37 percentage points [26] - **Log Prices**: In Shandong, the price of 3.9 - meter medium - A radiata pine logs at Rizhao Port this week was 740 yuan per cubic meter, the same as last week and a year - on - year decrease of 6.33%. In Jiangsu, the price of 4 - meter medium - A radiata pine logs at Taicang Port this week was 730 yuan per cubic meter, the same as last week and a year - on - year decrease of 9.88%. The price of 11.8 - meter 20cm+ general - grade spruce logs at Rizhao Port this week was 1,160 yuan per cubic meter, a week - on - week decrease of 1.69% and a year - on - year increase of 10.48% [33] - **Downstream Timber Prices**: The mainstream transaction price of 3000*40*90 radiata pine timber in the Shandong market was 1,250 yuan per cubic meter, and in the Jiangsu market was 1,240 yuan per cubic meter. The mainstream transaction price of 3000*40*90 spruce/white pine timber in the Shandong market was 1,800 yuan per cubic meter, and in the Jiangsu market was 1,680 yuan per cubic meter [36] - **Import Log Costs**: As of January 5, 2026, the January FOB (CFR) quotation range of New Zealand radiata pine logs was $109 - 112 per JAS cubic meter, with the main price at $110 per JAS cubic meter, a decrease of $2 per JAS cubic meter from December [42]

1. Report Industry Investment Rating - No relevant content provided 2. Core Viewpoints of the Report - In October, the log market showed a pattern of strong supply and weak demand, with inventory de - stocking slow and the fundamentals remaining loose. The LG2601 contract is currently undervalued relative to cost, but its valuation repair is restricted by the weak supply - demand pattern, with limited upside potential [5][6][39] - The report recommends three investment strategies: for single - side trading, go long on LG2601 at lows based on the October price floor, and if inventory accumulates significantly again, go short in small quantities; for arbitrage, focus on the 1 - 3 reverse arbitrage; for options, sell LG2501 - C - 800 [7][40] 3. Summary by Relevant Catalogs 3.1 First Part: Preface Summary 3.1.1 Market Review - In October, the log supply side maintained an "external increase and internal accumulation" pattern. New Zealand's September shipment was 1.766 million cubic meters (+6%), and the first four - week departure in October was 1.34 million cubic meters, still 8% higher year - on - year. The full - month estimate was 1.75 - 1.8 million cubic meters, a new high for the year. The inventory of 13 domestic ports first increased and then decreased, reaching 2.94 million cubic meters at the end of the month, 22% higher year - on - year. The demand side was generally "lackluster in the peak season." The average daily port delivery was 61,600 cubic meters, a slight 1.4% month - on - month decrease and 11% year - on - year decrease. The real estate capital availability rate hovered at 59.6%, and the cumulative new housing starts were - 21%. The United States imposed a 10% - 25% tariff on softwood and cabinets starting from October 14, causing export orders in the Yangtze River Delta to decline [5] 3.1.2 Market Outlook - The LG2601 contract is currently undervalued relative to cost, with the futures price significantly lower than the Shandong warehouse receipt cost and also in an inverted relationship with the duty - paid cost calculated from the November New Zealand radiata pine CFR quote. However, the valuation repair is restricted by the fundamentals, as port inventory remains high, supply pressure may continue to be released in November, and the demand side is lackluster in the peak season, with the average daily delivery volume declining year - on - year [6] 3.1.3 Strategy Recommendation - Single - side: Go long on LG2601 at lows based on the October price floor, and if inventory accumulates significantly again, go short in small quantities. Arbitrage: Focus on the 1 - 3 reverse arbitrage. Options: Sell LG2501 - C - 800 [7] 3.2 Second Part: Fundamental Situation 3.2.1 Market Review - Radiata pine: The log market was "warm externally and cold internally," with prices showing a trend of "initially stable and then secretly decreasing." The domestic and imported radiata pine prices moved basically in sync, while the sawn timber prices declined continuously due to weak terminal demand. The cost of imports increased, leading to a sharp drop in domestic ship - booking willingness and a 40% month - on - month decrease in new orders at the end of October [11][12] - Spruce/fir: In October, the spruce - fir market was characterized by "external price concessions, rising spot prices, and stable sawn timber prices." The European suppliers lowered their quotes, but the depreciation of the RMB against the euro offset most of the decline. The spot prices rose due to the shortage of large - diameter timber at ports, and the sawn timber prices remained stable, with processing profits being better than those of radiata pine [13][16] 3.2.2 Futures Market Review - As of October 31, 2025, the main log futures contract LG2601 on the Dalian Commodity Exchange showed a pattern of rising first and then falling, with a significant downward shift in the price center compared to the beginning of the month. It was mainly influenced by the reversal of policy expectations, the weak supply - demand pattern, and market sentiment changes [20] 3.2.3 Supply Increase and High Inventory - Overseas shipment: The New Zealand log departure volume remained high in October, but the growth rate slowed down marginally. The export was mainly targeted at China, accounting for over 75%, and the shipping cost fluctuations also affected the shipment rhythm [25] - Domestic arrival: The New Zealand log arrival volume in October showed a "low - then - high" pulsed rhythm. The total arrival volume in October was expected to reach 1.75 - 1.8 million cubic meters, a 20% increase from September, a new high for the year. The mismatch between high arrival and weak demand intensified the port inventory pressure [26] - Inventory change: The domestic log inventory in October showed a trend of "first accumulating and then decreasing," with the end - of - month total still higher than that at the end of September. Although there was marginal de - stocking in the middle and late October, the total inventory was still over 20% higher than the previous year, and the regional structure imbalance was still prominent [29] 3.2.4 Weak Real Estate, Low Delivery, and Weak Demand - Real estate demand: In October, the commercial housing transaction area declined month - on - month, and the new housing start - up willingness of real estate enterprises remained at a low level. The capital availability rate of construction sites was low, and the wood square orders decreased by about 15% year - on - year. The real estate demand for logs was basically flat month - on - month and decreased by 20% year - on - year, with limited seasonal recovery before the end of the year [33] - Log delivery volume: The port delivery volume showed a trend of "rising first and then falling." The average daily delivery volume in October was 61,600 cubic meters, lower than the September average and 11% lower year - on - year. The "high arrival + low delivery" situation continued, and the port de - stocking speed was much slower than in previous years [35] - Other demand and policy changes: The demand for furniture and packaging materials both weakened. The United States imposed tariffs on cabinets and softwood logs, causing a 20% - 30% decline in export orders in the Yangtze River Delta. The domestic "trade - in" subsidy had a concentrated release in September, and the furniture retail sales increased year - on - year but had limited incremental demand for logs. Policy factors such as US tariffs and EU anti - dumping measures suppressed external demand, while domestic fiscal support for forest tending was beneficial for long - term supply but had no short - term demand increase [36] 3.3 Third Part: Future Outlook and Strategy Recommendation - The log supply side maintained an "external increase and internal accumulation" pattern in October, and the demand side was "lackluster in the peak season." The supply - demand imbalance led to slow inventory de - stocking. The LG2601 contract is undervalued relative to cost, but the weak supply - demand pattern restricts its upside potential. The recommended strategies are the same as those in the preface summary [39][40]