Japan
Wood Products Prices
Dollar Exchange Rates of 25th
Aug
2023
Japan Yen 144.80
Reports From Japan
New economic
stimulus measures being drafted
By September the government intends to have drafted new
economic stimulus measures aimed at counteracting the
downside risks of inflation. It is anticipated the package
will include measures to encourage businesses to invest in
advanced technologies and boost worker pay to offset the
decline in inflation-adjusted wages. The government will
also consider ways to plan for supply chain disruptions
and expand investment in Japan by foreign companies.
The package will also include more inflation
countermeasures following a plan for subsidies to deal
with soaring gasoline, electricity and gas prices.
The Cabinet Office has used stimulus measures every year
since 2019. Previous measures were to deal with weak
consumption because of COVID-related restrictions.
See:
https://asia.nikkei.com/Politics/Japan-to-draw-up-stimulus-package-as-soon-as-September
Falling machinery orders
The total value of machinery orders received by major
manufacturers operating in Japan increased by 0.2% in
June from the previous month. In the April-June period it
increased by 7.1% compared with the previous quarter.
In the July-September period the value of machinery
orders has been forecast to decline by almost 3% and
private-sector orders, excluding volatile ones, are forecast
to also fall by around 3% from the previous quarter.
Source: Cabinet Office, Japan
Effort to drive growth through wage increases may not
deliver as expected
Private consumption contributes to about 50% of Japan's
nominal gross domestic product and around 15% of
Japan's GDP is thus attributable to consumption by
households headed by pensioners.
31 August 2023
The elderly account for a growing share of personal
consumption in Japan and according to Takuya Hoshino,
an economist at Dai-ichi Life Research Institute, a third of
Japan's total consumption last year was driven by
pensioners. Against this background the effort to drive
growth through wage increases may not deliver as pay
increases do not benefit pensioners who have seen the
value of their pensions eroded by inflation. Given Japan's
high proportion of retirees encouraging older people to
spend will be crucial to lifting GDP.
See:
https://asia.nikkei.com/Spotlight/Datawatch/Pensioners-share-of-spending-hits-nearly-40-of-total-in-Japan
Tokyo to eliminate areas congested with old
wooden
houses
In 2020 Tokyo authorities estimated the area of congested
old wooden houses at around 8,600 hectares, many of
which much would suffer severe damage in the event of a
major quake. In the quake that hit Tokyo100 years ago
thousands were killed largely because of the fires that
broke out. The authorities in Tokyo aim to reduce the
areas where old wooden houses are concentrated to zero
by 2040 in preparation for a major earthquake thais
forecast to strike the capital.
See:
https://www.japantimes.co.jp/news/2023/08/20/japan/society/tokyo-aiming-to-eliminate-areas-congested-with-wooden-houses/
Negative economic side effects of weak yen
starting to
show
Hiromi Yamaji, CEO of the Japan Exchange Group, has
been quoted as saying the yen is too weak and its benefits
for Japanese stocks are diminishing while negative
economic side effects are starting to show. The widening
interest rate gap between Japan and the rest of the world
and the weak yen are making imports much more
expensive.
Recently the yen dropped below145 to the dollar but
this
did not trigger a response from Japanese policymakers
which has been read a signaling the Bank of Japan will
carefully consider market intervention as there are still
some benefits from a weaker currency.
https://www.japantimes.co.jp/business/2023/08/24/economy/forex-weak-yen/
June wooden office furniture imports (HS 940330)
June shipments of wooden office furniture from China to
Japan accounted for 84% of all wooden office furniture
imports, a significant rise over May shipments. The value
of Japan’s wooden office furniture imports in June this
year were around 8% higher than in May and sharply up
(24%) on the value of May 2022 imports.
With such a high proportion of wooden office furniture
imports coming from China there was little market share
left for other suppliers.
Of the other 18 June shippers only Indonesia and the
UK
stand out at around 3% each of June shipments.
June kitchen furniture imports (HS 940340)
After the surge in imports of wooden kitchen furniture at
the end of the first quarter of this year there has been a
steady decline and the value of June imports were down
17% year on year and compared to a month earlier June
arrivals were flat.
For the year to date, just two shippers, the Philippines and
Vietnam, dominated Japan’s imports of wooden kitchen
furniture. In June shipments from the Philippines
accounted for 46% of the value of imports of HS940340
with a further 39% coming from Vietnam. The other
shippers of note in June were Italy and Germany but the
value of shipments was small.
June wooden bedroom furniture imports (HS 940350)
The wide variation in the values of wooden bedroom
furniture observed in the first quarter of this year have
subsided and the value of monthly imports over the past
three months has returned to the average level seen at the
end of last year.
However, there is a clear downward trend in the value of
imports and the value of June imports was 35% below that
in June last year. Compared to a month earlier the value of
June imports were little changed but the value of wooden
bedroom furniture imports exceeds by far the value of
other furniture categories tracked in this report.
The top supplier in June was, once again China,
accounting for 64% of June import values followed by
Vietnam at 29%. Malaysia and Indonesian shippers are in
the top 20 ranking of shippers of wooden bedroom
furniture but shipments are small.
June wooden furniture parts imports (HS 940391)
As is the case with bedroom furniture, the wide variations
monthly imports of wooden furniture parts (HS940391)
seen earlier in the year have levelled off and settled back
to the trend seen at the end of 2022.
Around 85% of June imports of wooden furniture part
were supplied by shippers in just four countries, China
(45%), Indonesia (18%), Malaysia (11%) and Vietnam
(10%). Other significant shippers in the top twenty
suppliers for June were Italy and Poland.
Month on month there was an 11% rise in the value of
wooden furniture parts imports in June but compared to
the value of June 2022 imports there was little change.
Trade news from the Japan Lumber Reports (JLR)
The Japan Lumber Reports (JLR), a subscription trade
journal published every two weeks in English, is
generously allowing the ITTO Tropical Timber Market
Report to reproduce news on the Japanese market
precisely as it appears in the JLR.
For the JLR report please see:
https://jfpj.jp/japan_lumber_reports/
Total housing starts in first half of 2023
Total starts during January to June of 2023 are 409,549
units, 2.2% less than January to June, 2022. The starts of
owner’s and unit built for sale kept decreasing. There is no
recovery for the starts of owner’s. Total starts in June,
2023 are 71,015 units, 4.8% less than June, 2022 and this
is for the first time in two months to not exceed the starts
in June, 2022.
Owner’s unit is 110,254 units, 10.5% down from the
same
month last year. Unit built for sale is 68,944 units, 4.4%
less than the same month last year. Rental units in June,
2023 does not exceed June, 2022’s result but the total
starts of rental unit during January to June, 2023 are
168,810 units, 2.5% more than the same period last year.
The starts of conventional wooden houses are 170,509
units, 6.0% down from the same month last year. The
starts of 2 x 4 houses are 42,103 units, 2.0% less than the
same month last year. Prefabricated house is 5,026 units,
11.3% up from the same month last year.
Condo is 58,473 units, 5.3% up from the same month last
year. Total starts of condo in June, 2022 were 55,525
units, 4.4% more than June, 2021.
A forecast for the starts of owner’s at the second half of
2023 is very difficult. The total starts of owner’s in June,
2023 are 20,325 units, 12.4% less than June, 2022. This is
straight 19 months decreasing.
Rental unit in June, 2023 is 30,112 units, 0.6% down from
the same month last year. This is for the first time
decreasing since April, 2023. Rental unit in the Greater
Tokyo Metropolitan area is 11,241 units, 5.2% up from the
same month last year. This is straight four months
increasing.
European lumber
Movement of European lumber in Japan rose slightly in
July to August, 2023. One of the reasons is that many
constructions of a house framework completed before the
Japanese summer holiday in August. A number of
constructions is less than last year but this situation is
better than the situation in April to June, 2023. Demand of
European lumber after the Japanese summer holiday will
not increase but not decrease.
The price of laminated lumber keeps falling. However, the
price of whitewood stud has been stabilized since May,
2023. It is 69,000- 71,000 yen, delivered per cbm. The
price used to be 50,000 – 55,000 yen, delivered per cbm,
before the woodshock so it is able to say that the price of
whitewood is still high.
However, demand is lower than before. The price of finger
jointed cedar stud and KD cedar solid stud are 50,000 –
60,000 yen, delivered per cbm. There is not a shortage of
whitewood stud yet even though arrival volume of
whitewood stud has been low since last November and
also inventory at the ports has been declining.
A number of contracts in August is less than the same
month last year. Whitewood stud in Europe was €410-420,
C&F per cbm in July and August. It is €30 down from
May and June. However, the yen continued to depreciate
against the euro so the import cost is 67,000 – 70,000 yen,
FOB per cbm. This import cost is unchanged from last
time.
Plywood
The price of domestic softwood plywood is about to reach
the bottom because the inventory of domestic softwood
plywood has been decreasing and plywood companies did
not change the price at the end of July, 2023.
12mm 3 x 6 of structural softwood plywood is 1,600 yen,
delivered per sheet. In some area, the price is under 1,600
yen, delivered per sheet , but it does not influence the
market price so far. Anticipation of falling prices has been
solved and consumers started purchasing structural
softwood plywood. Inventory at plywood companies in
June, 2023 was 0.7 moth of shipment and this is an
appropriate level. There is a shortage of several kinds of
plywood but it is able to find and purchase lumber at other
companies.
Imported plywood in June, 2023 was 142,632 cbms,
38.2% less than June, 2022. Especially, demand and
supply of South Sea plywood is very tight. The price of 12
mm 3 x 6 of painted plywood for concrete form is 1,900
yen, delivered to form plywood firms per sheet and this is
about 50 yen up, delivered to form plywood firms per
sheet, from June. It is 1,950 yen, delivered at wholesalers
per sheet. Form plywood and structural plywood are 1,800
yen, delivered to wholesalers per sheet. This is leveled off
from last month.
2.5 mm plywood is 780 yen, delivered per sheet. 4 mm
plywood is 1,000 yen, delivered per sheet. This is
unchanged price from previous month. 5.5 mm plywood is
1,200 yen, delivered per cbm and this is 50 yen higher
than the previous month.
2.4 mm 3 x 6 plywood in South Asia is around $950, C&F
per cbm. 3.7plywood is $880, C&F per cbm. 5.2 mm
plywood is $850, C&F per cbm. 12 mm 3 x 6 painted
plywood for concrete form is $650, C&F per cbm. Form
plywood is $560, C&F per cbm.
Structural plywood is $560, C&F per cbm. Inventory of
painted plywood for concrete form is decreasing. Some
shippers in South Asia raised the selling price by $10 – 20,
C&F per cbm, up from the previous time. Consumers in
Japan had been cautious about purchasing plywood due to
the exchange rate fluctuation but some consumers
purchased plywood when the yen appreciated against the
dollar in the middle of July.
South Sea logs and products
An exchange rate fluctuation influences South Sea lumber
and Chinese lumber. Japanese buyers purchased lumber
when the dollar became 130 yen from 145 yen but they
stopped purchasing lumber as the yen depreciate against
the dollar. Logistics companies wait and see the right
timing to purchase lumber.
Indonesian Merkus pine lumber is $820 – 850, C&F per
cbm. Chinese red pine lumber is $870 – 890, C&F per
cbm. These prices are steadiness.
It is the season of fresh Merkus pine logs in Indonesia and
it is not easy to change the prices. Chinese companies
narrow down the orders of raw materials and they are not
active to produce lumber. They decided to not lower the
lumber price for Japan because they know that demand of
lumber in Japan is very sluggish.
In Japan, Merkus pine lumber is around 122,000 yen, FOB
per cbm. Chinese red pine lumber is around 127,000 yen,
FOB per cbm. These prices stabilize from the previous
time. There are a few new orders so fluctuation of
domestic price is small. Inquiries for South Sea lumber are
sluggish due to low demand of deck.
Demand and supply of South Sea log is balanced. Arrival
volume during January to June, 2023 is 14,343 cbms,
21.4% less than the same period last year. The arrival
volume decreased by over 20% from last year but there are
enough South Sea logs for steel manufacturers and
shipbuilding companies. South Sea log companies in
South Adia will not lower the price because they do not
have enough logs.
Demand and supply of lumber at the 1st half of 2023
According to The Ministry of Agriculture, Forestry and
Fisheries, shipment of lumber during January to June,
2023 does not exceed the result of January to June, 2022.
It is 6% less than last year. Inventory is 12% more than the
same period last year. Shipment of log during January to
June, 2023 is nearly 5% down from the same period last
year. Also, shipment of lumber during January to June,
2023 is almost 7% down.
Arrival volume of domestic log at the first half of 2023 is
6,494,000 cbms, 3% down from the first half of 2022. A
ratio of domestic log of all logs is about 81.1% and it is
3.6 points increased from last year. Since the starts of
wooden house during January to June, 2023 decrease by
4.9% and this result has influenced demand and supply of
lumber.
Damage by torrential rain in Akita Prefecture
There was a torrential rain on 14th July, 2023 in Akita
Prefecture. There have been serious damages at domestic
lumber plants. Roads to mountains are closed because of
collapse. There are high-performance machines for
forestry left at the mountains. It will be able to go to the
mountains after the local government finishes checking the
safety in August.
The price of logs or lumber will remain low and there will
be less logs. Also, there is a possibility of delays for
establishing new machines of large diameter logs, which
were planned to start an operation in autumn. The total
damage by this torrential rain is about 7.7 billion yen for
agriculture, forestry and fishery industries.
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