Japan Wood Products Prices

1-15th March  2005

Dollar Exchange Rates of  7th March  2005

Japan Yen 104.75

Report From Japan  

Earthquake resistant houses  

An advisory body to Japan's Ministry of Land, Infrastructure and Transport, has recommended the target that 90% of all new houses in Japan be earthquake resistance within ten years. An official acceptance of this proposal is expected by late May. It is estimated that about 25% of Japan's housing stock (about 47 million units) and about 35% of the other buildings (estim. 3.4 million units) are not quake resistant. 

Russian log and lumber import in 2004  

Total imports of Russian logs and lumber in 2004 increased about 10% over 2003. Log imports have been reported at 5,729,000 cubic metres in 2004 just below the 5,760,000 cubic metres registered in 1999.  2004 lumber imports were the highest ever recorded.  

Logs for plywood production and sawnwood manufacture increased by about 20% but logs for pulp fell by 17%. By species, red pine and larch imports increased while whitewood log imports decreased by 22% because of limited whitewood sawmills in Japan and because of heavy imports by China and Korea. 

Japan's sawnwood imports from Russia continue to grow setting new records every year and the proportion of kiln dry imports is increasing due, say analysts, to low energy costs in Russia.  

North American lumber import in 2004 

Total imports of North American lumber in 2004 were 3,979,000 cubic metres, 4.4% more than 2003. The main item is SPF lumber, some 43% in total N. American lumber imports. The majority of SPF lumber is for 2x4 house construction.  

New 2x4 housing starts in 2004 were the second highest in history, which generated much higher demand for lumber. Also, heavy inventory replenishing purchases in early 2004, after critical inventory shortage in late 2003 and early 2004 in Japan pushed the import up.  

Hemlock imports also increased (+3.4%). There are practically only four supply sources of hemlock lumber for Japan and those mills were active suppliers to Japan.  

Douglas fir lumber imports increased (+ 3%) while yellow cedar (cypress) imports declined sharply by 15.8%. The reason for the drop in Japan's imports is said to be the big jump in demand in China where increased shipments of cypress in form of logs, semi finished products and lamina have been recorded.  These logs are processed and shipped to Japan eventually.  

Tropical log prices up 

Weather in supplying regions continues to be unsettled and log production is reportedly limited. With this tight supply, log FOB prices are edging up. Infact, FOB prices began to firm late November 2003 at the beginning of rain season and have continued to move up.  

Meranti regular logs are now more than USUS$160 per cubic metre FOB, but actual contracts are around US$157-159, US$2 up from late January. Small meranti FOB prices are unchanged at US$128-129 and super small logs are moving at US$118-119 per cubic metre. 

Keruing and kapur log prices are very firm with active purchases by India importers. The Japan Lumber Report says that Japanese importers cannot match the high prices Indian importers can accept, except for some special orders. Kapur floater log FOB prices are reported at US$177-179 per cubic metre, US$5 higher than a month ago. 

Plywood log wholesale prices in Japan went up for the first time in seven months after both FOB prices and ocean freight costs have gone up. Japanese log importers, who suffered losses throughout last year, have tried to cover costs but plywood mills have resist strongly.  

During late February negotiations, the importers proposed a Yen 300 per koku raise but the final settlements were only Yen 50-100 up at 5,850-5,900 yen per koku C&F.  

FOB prices, say Japanese trade analysts, are likely to go up further so that the cost of future arrivals will be higher still. This does not impress the Japanese plywood mills apparently who remain passive saying the level of local prices depends on how log FOB and plywood prices will move. 

Company News  

Japan Kenzai Co., Ltd. has, reportedly, established a veneer manufacturing company, JK Industry Co., Ltd. to provide veneer for its own subsidiary company, Key Tec Co., Ltd., which manufactures structural LVL. The plant will consume about 10,000 cubic metres of softwood logs a month to produce 7,000 cubic metres of veneer. At start up it will use 3,000 cubic metres of softwood logs together with 2,000 cubic metres of super small tropical hardwood logs. 

Nichiha Corporation and Sumitomo Forestry Co., Ltd  have announced they intend to set up a joint venture building materials company. The new company will manufacture a variety of non-flammable building materials for interior finishing and, in the future, it will produce structural materials such as load bearing wall units.  

Logs For Plywood Manufacturing 

February Wholesale Prices

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