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Japan
Wood Products Prices
Dollar
Exchange Rates of 8th Februray 2006
Japan
Yen 118.62
Report
From Japan
Housing starts reached 8-year high in 2005
New housing starts reached almost 1,236,122 million units in 2005, up 4% from 2004 (see chart). This was the highest level in the last eight years and the first over the
1.2 million mark in five years due to a general recovery in the Japanese economy. Rental units accounted for 504,191 units, a 5-year high and the first time to exceed
500,000 units since 1997. Units built for sale reached 369,103 units, up 7% from 2004, of which condominiums accounted for 229,395 units (up 12.4%), while detached units accounted for 137,829 (down 1%). However, owner built units declined to 353,282, down 4.5% from 2004 and the second consecutive drop.
Wood based units were 542,859 or 44% of all built housing starts, up 0.4% from 2004. Of these, 2x4 units increased almost 6%, the fourth consecutive annual increase. In October, Japan’s Research Institute of Construction and Economy had forecast new housing
starts just under 1.2 million units for 2006 (see chart). However, this might be an underestimation if the Japanese economy continues to improve.
Log price negotiations stall again
Price negotiations on imported tropical logs between importers and domestic plywood mills failed in January and were carried over again to early February. There remained gaps between asked and offered prices.
Log importers asked ￥7,500 per koku CIF (1 koku=0.278 m3) for Sarawak meranti regular logs arrived in December, while plywood mills offers were at about ￥7,200. Plywood mills continued to resist further log price increases, while importers are reported to be
suffering financial losses. The recent depreciation of the yen has complicated the negotiations.
FOB prices firm regardless of Japanese demand FOB prices continue to advance in Malaysia. As demand from domestic plywood mills as well as from India, China and Vietnan remains strong, log suppliers are bullish regardless of developments in Japan. Due to the
lunar New Year holidays, log supply is expected to remain tight up to late February. Sarawak meranti suppliers are pushing FOB prices up $2-3 per m3 for all grades. Kapur prices, in turn, have moved up close to keruing price levels after some aggressive buying by
India. This, in turn is pushing demand and prices for keruing.
Marubeni invest in plantation business
Japan's Marubeni Corporation has acquired majority control of two Indonesian companies: P.T. Musi Hutan Persada (MHP), a plantation company and P.T. Tanjungenimu Lestari Pulp and Paper (TEL), which buys raw material from MHP. MHP holds a concession for industrial plantation for 43 years. Out of its 300,000 hectares of timberland, 190,000 hectares are forest
plantations, 95% of which is of acacia mangium with an annual harvest of about 2.2 million m3. TEL buys acacia mangium from MHP and has an annual production of 450,000 ton of pulp for paper, which are sold over the world since 2000.
Marubeni Corp. plans to develop not only the production of pulp but also of board and building materials utilizing surplus plantation production. Marubeni sees the utilization of plantation wood as an important strategy in the face of tightening availability of timber from natural forests worldwide. Marubeni intends to develop its building materials businesses from plantation forest in Indonesia.
Half of wooden houses need reinforcement
NPO Corporation, Japan’s Environment and Disaster Research Center, indicated that 12.2-14.9 million of wooden house units, out of total 28-30 million units, needed reinforcement for earthquake resistance. Of these, 11.65-14.37 million of detached wooden house units
have safety problems, particularly those built before the new anti-earthquake standard set in 1981.
It would take 24-30 years to reinforce all house units under risk, assuming that 500,000 units are renewed or rebuilt annually. But, at the same time, 500,000 old house units are replaced annually; this may slow down reinforcement activities of house units under risk.
December and
January Wholesale Prices
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