Japan Wood Products Prices
1-15th August  2004

Japan Wood Products Prices

Dollar Exchange Rates of  8th August  2004

Japan Yen 110.4 

Report From Japan  

Tropical log prices unchanged  

Price negotiations between Japanese plywood mills and Japanese log importers have finally been settled. Final agreed prices for August are unchanged from late June prices, following a battle by importers to push up prices and a battle by mills to pull down prices.  

Importers say that the actual cost of Sarawak Meranti regular logs is about Yen 6,600 per koku CIF, while the prices agreed with the plymills is Yen 6,300-6,400, so the importers have to bear loss of Yen 200-300 per koku. 

Plywood mills have refused to pay any higher log prices because the plywood market in Japan is slow. This price seems to be the best the importers could do after plywood mills had accepted the Yen 600 per koku increase two and a half months ago. Even at current prices today's price represents an almost 10% higher cost for the mills.  

Small Meranti log prices in late July were Yen 5,700-5,750 and Super Small logs were Yen 5,250-5,300 per koku CIF, both are up by 50 yen. FOB prices turned beginning late June after log production recovered after the monsoon. 

Current FOB prices for Meranti regular are about US$157-159 per cubic metre, which is US$3-4 lower than early July prices. However, the landed cost remains unchanged due to unfavorable exchange rate and higher ocean freight rates.  

Freight from Sarawak is up by US$2 per cubic metre since June and some operators suggest that further increases are on the way. Current freight for Sarawak loading (one port loading and two ports

discharging) is about US$33-33.50 per cubic metre and rising.  

First half housing starts 

Total housing starts in June were 106,582 units, 7.4% less than the same month a year ago. Total starts for the first half of this year were 568,681 units, 0.3% more than the same period of last year.  

Of this total, owner's units were 180,122, 3.3% less and rental units were 217,342, 0.3% less but units 'built for sale' increased by 6.1% to 167,091, out of which condominiums were 97,728 up 2.5% and detached units were 68,516, up 12.6%.

The Japan Lumber Report suggests that the figures show that there is still some active demand before the expiry of the tax break measure on mortgage loans at the end of the year. But the Report notes that the performance of the sector is no as good as last year.  

For more information on the Japanese market please

see www.n-mokuzai.com

Source:ITTO