Japan Wood Products Prices

16-31th May 2005

Dollar Exchange Rates of  20th April  2005

Japan Yen 108.14

Report From Japan

Record softwood plywood production 

The total amount of plywood coming onto the Japanese market in March was 643,000 Cu.m, 3.1% less than February (but 0.9% more than March 2004). A decline in imported plywood arrivals was the reason for the drop.  

In contrast to the decline in plywood imports, domestic production of standard plywood was at a  high of 280,000 Cu.m, and out of this softwood plywood production was at a record high of 205,000 Cu.m. 

Plywood imports in March were 10% less than February and at the lowest level since October 2004. The reasons for the decline, says the Japan Lumber Report, were high export prices demanded by Indonesia and Malaysia, especially at a time when the Yen had weakened against the US dollar and weakness in the plywood market in Japan which was flat.  

Local sales contracts were reported as less than normal for this time of year. 

Quakeproof houses discussed 

The Japanese Ministry of Land, Infrastructure and Transport has set a target to have 90% of Japanese homes earthquake resistant in ten years.  

The ministry has now revealed the support it proposes to make this a reality. The first step will be to create an environment, making it easy for the public to consult with specialists to assess the quake resistance of their homes and the work necessary to upgrade the level of resistance.

Cost effective and easily understood technology for quakeproofing will be developed and efforts will be made to deliver systems that are affordable. 

The number of building sector professionals and contractors dealing with upgrading works will be expanded and effective quake-proofing measures will be promoted.  

Safety measures, such as fixing furniture solidly to the wall or floor to avoid movement during a quake and methods to prevent falling window glass will be promoted. 

Tough tropical log price negotiations 

Price negotiations between Japanese log importers and plywood manufacturers are tough going still as importers are asking higher prices as FOB prices have gone up as has ocean freight costs. 

Negotiations on prices, which began in late April, carried over into May but still the two sides were unable to find a compromise. Some plywood importers accepted a small increase, as proposed by the mills, so as to prepare for another price increase in early June. 

On the basis of current costs, imported large sized meranti regular logs should be wholesaling at about Yen 6,300-6,400 per koku CIF, whereas they are being sold at only Yen 5,950-6,050 yen per koku CIF.  

The trade is looking for another 5% increase just to cover costs. Never-the-less, current prices are about Yen 100 per Koku higher than late March. Small meranti prices are about Yen 5,200-5,300 per koku CIF and super small prices are about Yen 4,800.

Ocean freight still high 

Despite a short-term easing of freight rates in April, freight costs firmed  again in May. Shipping companies are confident in asking higher rates as space is limited and bunker costs are up. Current rates for Sarawak loading (one port loading and two ports discharging) is US$35.50-US$36.50 per cubic metre on a full load basis. On top of this FOB prices also keep climbing. 

Despite fair weather in both Sarawak and Sabah, log inventories remain limited reports the Japan Lumber Report and purchases by other countries, such as China and India, is reported brisk. Everything is tending to push up landed prices in Japan. 

Sarawak meranti regular FOB prices for Japan are US$163-165 per cubic metre (SQ up),which is US$1-2 up on late April prices. Japanese log importers foresee FOB prices will go up as high as US$170. In contrast, Japanese plywood mills expected that FOB prices will fall as the weather gets drier in Malaysia, so the two sides are far apart at present.

Market slump continues 

The Japanese plywood market remains weak following on from the situation seen over the Golden Week holidays in early May. Domestic 12mm softwood panel prices are down to below Yen 700 per sheet, despite proposals from major plywood mills to increase prices to 730 yen per sheet delivered. Trading is reported as weak without any sign of firming. Wholesalers say that as long as low priced products are being dumped onto the market prices will not recover.  

At the same time, Japanese analysts report that inventories of tropical plywood continue to decline because of lower arrivals and that the current prices do not reflect the tight supply situation, especially for 3x6 concrete formboard panels which moving down. Formboard panels are now selling at Yen 830-840 per sheet delivered in Tokyo area market. 

Concrete formboard panels for coating and structural panels are in short supply and there are no low priced offers on these items say importers, but endusers are still expecting bargain prices. 

The prices of 3x6 concrete formboard panels for coating are moving about Yen 980 and of 12 mm tropical structural panels of F 4star(prime category) are at Yen 870-880 yen. Prices for these products are said to be firming and the importers are not accepting low priced offers any longer.

Adhesive prices up again 

Oshika Corporation, a major wood industry adhesive maker, has raised adhesive prices by 10-15% since April. Prices have gone up by Yen 15 per kilogram for phenolic resins for plywood and board manufacture and Yen 5 per kilo for melamine resins.  

Oshika increased prices of adhesives twice last year and the market accepted this because petrochemical prices went up dramatically.  The latest round of increases is because of the continued increase in oil prices this year. 

May Wholesale Panel Prices

Logs For Plywood Manufacturing        

For more information on the Japanese market please

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