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Dollar Exchange Rates of 8th November 2005 Japan Yen
117.35 Log sales prices up slightly The
import cost of Southeast Asian logs went up
with FOB prices
and ocean freight, further compounded by a weakening yen. The actual cost
of Sarawak meranti regular reported in late October negotiations was about
7,200 yen per koku CIF (koku=0.278 m3), higher than a month ago. Due to
resistance by Japanese plywood mills, prices were settled at about
6,850-6,900 yen per koku CIF, well below actual cost but up 100 yen from a
month ago. Prices for meranti small were quoted at about 6,000 yen, close
to actual cost. Overall, log prices have increased by 1,000 yen per koku
compared to January prices. Key Tec Co., Ltd., a Southeast Asian hardwood plywood and laminated veneer lumber manufacturer, has raised the sales prices of plywood due to high cost of logs and adhesives. Key Tec raised the prices of medium and thick panels by 10% from November and is considering another price hike. New prices per sheet delivered (F 4star,category 1) are 550 yen for medium thick 4mm, 650 yen for 5.5mm, 1,350 yen for 9mm thick and 1,600 yen for 12mm. Besides increasing log costs, price hikes were also due to a weaker yen and higher fuel costs. Log prices are expected to remain firm since production regions are heading for rainy season through next spring. Niigata Gouhan Shinkou Co., Ltd. followed suit and has also raised its sales prices of tropical plywood by 10% from 1 November. New prices per sheet delivered in the Tokyo area (F4star, category 1) are 470 yen for 3mm thick, 550 yen for 4mm and 680 yen for 5.5mm. Tropical plywood imports declined in August Total supply of plywood in August in Japan was 611,700 m3, 14% lower than the same month a year ago and the lowest supply level this year. Imports of plywood in August were 350,200 m3 , 24% lower than August last year. Imports from Malaysia and Indonesia were 155,500 m3 and 146,100 m3 in August, down 18% and 36%, respectively, from the same month last year. Imports from Indonesia were higher than July, the first increase in five months. The increase was probably due to a temporary shift to Indonesian sources after Malaysian plywood production dropped due to rising log costs. Japanese domestic production of standard plywood was 261,400 m3 in August, up 5% from August last year, which seems rather high considering the summer holidays in August. Team proposes import duty on wood products A governmental project team on revitalization of forest and wood industry has proposed to impose a ‘Forest Environment duty’ on all imported wood products. The purpose of the duty is to promote more use of domestic wood and reduce imports. The duty rate would be 10-20% on import prices and the revenue would be used to maintain domestic forests. Local analysts felt that the duty was against the worldwide tide of free trade and hard to justify the use of revenues from imported wood products to maintain and protect domestic forest. The proposed duty also partially overlaps an ‘Environment tax’ proposed by the Ministry of Agriculture, Forestry and Fisheries and the Ministry of Environment. October and November Wholesale Prices
Share of wooden houses declined to 44% Total
housing starts were 108,086 units in September, 0.2% less than the same
month a year ago but the fifth straight month with more than 100,000
units. Starts of detached family units remain weak while rental units and
condominiums grew slightly. Seasonally adjusted annual starts reached
1,245,000 units. Japanese housing starts, which are a good indicator of
plywood consumption in the country, reached over 907,435 units in the
Jan-Sep 2005 period, 2% higher than the same period in 2004. By structure,
the share of wooden houses in total housing starts declined from 46% in
Jan-Sep 2004 to 44% in the same period in 2005. Japan’s
Research Institute of Construction and Economy has forecast new housing
starts as 1,198,000 units in 2006, comparable to 2005. Positive factors
identified include improvement of employment and better income environment
as a result of continuous recovery of the economy. It also expected active
buying from baby boomers. Negative factors identified comprise gradual
increase of long-term mortgage interest rates and declining property
prices. The possible abolishment of income tax break would also affect
negatively net income. Both factors are expected to offset each other and
result in unchanged housing starts for next year. Total housing starts in
2005 are estimated to be about 1.2 million units, almost unchanged from
2004. Out of this total, the estimated number of owner’s units will be
about 358,000, 2.5% less than 2004. Rental units and units built for sale
are estimated at 475,000 and 359,000, up 1.7% and 2.7% from 2004,
respectively.
New
particleboard plant being built in Indonesia Tokyo’s Sumitomo Forestry Co., Ltd. announced that its Jakarta-based subsidiary company, Kutai Timber Indonesia (KTI), will build a particleboard manufacturing plant for about US$39 million with an annual production capacity of 128,000 m3 and employing 330 people. Sumitomo Forestry already owns a particleboard plant in Indonesia through P.T. Rimba Partikel, RPI. The construction of the new particleboard plant starts this month and will be completed in September 2007. KTI, established in 1970, started with plywood manufacturing and later expanded into secondary processed building materials. KTI annual plywood and processed wood products production are about 130,000 m3 and 56,000 m3, respectively. KTI employs 3,000 people including part-time workers. Total sales reached US$66.6 million in 2004. KTI plans to implement sustained yield management using plantation falcata (over 35.8 million trees had been planted by 2004) and wood waste from the plant. For more information on the Japanese market see www.n-mokuzai.com | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Source: ITTO' Tropical Timber Market Report | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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