Japan Wood Products Prices

16-28th February  2005

Dollar Exchange Rates of  18th Feb.  2005

Japan Yen 105.6

Report From Japan

Plywood supply in 2004  

The total supply of plywood from domestic supply and imports in 2004 was 8,110,000 cubic metres, which was 6.7% higher than 2003 and this was the first time in four years that the total supply exceeded eight million cubic metres. Imports were 4,940,000 cubic metres, 8% more than 2003 while  domestic production was also 4.9% up at 3,170,000 cubic metres.  

The demand in 2004 was active due to higher housing starts at 1,189,000 units, 2.5% more than in 2003. The domestic supply of plywood increased as manufacturers expanded production lines for structural panels and panels made of domestic species.  Manufacturers of softwood panels also increased the production of thicker panels. 

Imports increased in 2004 as more overseas manufacturers became JAS certified, also some domestic panel prices rose so that importers were more optimistic in buying larger quantities of imports. 

By source, 2,,423,000 cubic metres of imports came from Indonesia, 8.1% up from 2003, 1,995,000 cubic metres came from Malaysia, up 7.9% on 2003. 334,000 cubic metres was imported from China, 22.3% more than in 2003. The total supply of domestic softwood plywood was 2,,000 cubic metres, 14.6% more than in 2003, out of which panels thicker than 12 mm were 1,852,000 cubic metres, up 16%. The share of softwood panels in domestic production increased 5.8% to almost 68%.  

South Sea plywood 

January arrivals of concrete formboard panels for coating were only about half of a normal months' arrivals so market availability is limited and prices are firming to Yen 970-980 per sheet delivered Tokyo regional market wholesalers. 

Meanwhile new orders are on hold because the mills, especially in Malaysia, are closed as the country celebrates the Chinese New Year. On top of this offers from Indonesian suppliers are firming in price. The Japan Lumber report says many Indonesian suppliers are now offering US$370 per cubic metre C&F for JAS concrete formboard 3x6 panel for Japan.

Plywood 

On the domestic Japanese market orders are reportedly slow and the plywood market is in a slump. 

Inquiries within the traditional distribution channels have slowed because direct users such as  major house builders cut purchases in February. Plywood mills think that Japanese house builders have completed purchases for end March delivery.  

The market for domestic made softwood structural panels of 12 mm F 4star (category 1) is reported as particularly weak and the prices are softening. Up until mid February, wholesalers were reducing sales prices to move inventories but now even building materials trading companies are offering lower prices.  

In the Tokyo regional market, prices of 12 mm softwood structural panel F3star(category 1) are Yen 810-820 per sheet delivered, about 20 yen lower than a month ago. In this adverse situation, Hayashi Veneer (Osaka) has announced an increase by Yen 20-30 since February 20 then

another increase of Yen 20-30 yen will come on stream March 1 to bring the sales prices up to about Yen 900 per sheet.  

Some trader have commented that price recovery is hard unless mills clear away the through discount prices or mills stop production sharply because the supply of softwood plywood is abundant.  

The market for softwood structural plywood peaked last July since when prices have kept falling for six continuous months, now however, they seem to be at the bottom of the range .

European lumber, Rumania advances rapidly  

Total imports of European softwood lumber in 2004 (excluding Russian imports) were 2,968,000 cubic metres, 9% up on 2003. Finland topped the list of suppliers at 1,166,000 cubic metres, 13.4% more than 2003.  Sweden is second at 904,000 cubic metres, but 0.7% less thjan in 2003.  Austria was the third largest supplier at 480,000 cubic metres, 5.3% down on 2003. These three countries took a 86% share of total import from Europe.  

Imports from a new supplier, Latvia, were ranked fourth at 105,000 cubic metres, 43% up while supplies from Rumania (5th ranked supplier) came in at just 79,000 cubic metres but an amazing plus 2000% jump. 

Also both Estonia and Poland increased the panel exports to Japan. Rumanian suppliers took advantage of preferential duties and the bulk of the supply to Japan came from H. Schweighofer, which apparently intends to double the volume of exports to Japan to 150,000 cubic metres in 2005. 

Total imports of European lumber in 2004 were 9% more than the last peak year of 2003 but it was hard going for suppliers who had to struggle with the steep appreciation of the Euro against the Yen. 

Red pine log prices drop  

Red pine log CIF prices have reportedly dropped below US$100 per cubic metre as supplies have increased significantly as it is now the peak harvest season in Siberia . CIF prices of other species are holding at about US$100 (larch) and US$105 for whitewood. It is only the prices for red pine that are weakening. Red pine prices softened to US$96-98 per cubic metre since late January for  standard quality or lower logs with some contracts even at US$94-95. Fine grain quality red pine CIF log prices are close to US$105 per cubic metre. 

It is becoming a buyers' market in Japan after major red pine suppliers dropped prices. Loading ports are full with logs as suppliers are anxious to ship logs out before March when the P.I. insurance is required for log ships calling Japanese ports.

For more information on the Japanese market please

see www.n-mokuzai.com 

Abbreviations

LM        Loyale Merchant, a grade of log parcel	Cu.m         Cubic Metre
QS         Qualite Superieure	Koku         0.278 Cu.m or 120BF
CI          Choix Industriel	FFR            French Franc
CE         Choix Economique	SQ              Sawmill Quality
CS         Choix Supplimentaire	SSQ            Select Sawmill Quality
FOB      Free-on-Board	FAS            Sawnwood Grade First and
KD        Kiln Dry	Second
AD        Air Dry	WBP           Water and Boil Proof
Boule    A Log Sawn Through and Through	MR              Moisture Resistant
the boards from one log are bundled	pc         per piece
together	ea                each
BB/CC  Grade B faced and Grade C backed	MBF           1000 Board Feet
Plywood	MDF           Medium Density Fibreboard
BF         Board Foot	F.CFA         CFA Franc
Sq.Ft     Square Foot	Price has moved up or down

Source:ITTO