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Japan Wood Products Prices

16-31th October 2010

Japan Wood Products Prices

Dollar Exchange Rates of  30th Oct 2010

Japan Yen 80.47

Reports From Japan

 August plywood imports down from July
According to the Japan Lumber Reports (JLR), plywood consumption in Japan during August was 506,376 cu.m, up 22% from August 2009, but 5% less than recorded in July 2010.

August plywood imports amounted to 286,800 cu.m, an increase of 26% from August last year, but lower than July 2010 imports which topped 303,000 cu.m. The strong Yen has encouraged importers to increase imports. However, importers are becoming cautious as the market in Japan remains subdued and thus, arrivals are expected to decline for the last quarter of the year. Plywood imports from Malaysia for the first eight months of the year have been more than expected, says JLR.

Plywood demand picks up for period under review
Due to relatively low inventories and improved demand, imported plywood prices firmed.

The average market price for imported 3x6 concrete formboard is now Yen 880-890 per sheet delivered. Prices for 3x6 coated concrete formboard are now at Yen 1,040-1,050 per sheet and for 2x6 at Yen 760-780 per sheet. JLR reports that the strong Yen is offsetting the FOB price increases in US dollar, keeping prices relatively steady.

Plywood mills in producer countries reportedly have orders for the next two months. Currently, mills are procuring logs swiftly to build up log inventories as the rain season is beginning and thus will have an impact on log supply.

Kapur log prices climb sharply
Kapur log prices in Sarawak are moving up sharply, reports JLR. FOB prices reached US$300 per cu.m for kapur regular logs and suppliers in the Tanjung Manis port have been asking for higher prices. At the Baram port, prices are slightly lower at US$295-298 per cu.m, up by US$40-45 per cu.m from the beginning of the year. Kapur log prices in Sabah fetched US$270 per cu.m.

As selangan batu log prices exceeded US$500 per cu.m FOB, India shifted to import other species like meranti and kapur increasing demand and prices for these species. Much of the logging in Sabah and Sarawak is now carried out in remote areas, thereby increasing log transport costs and resulting in delays. Prolonged poor weather conditions and the strong Malaysian Ringgit against the US dollar are lifting up the FOB prices, reports JLR.

During the period under review, meranti FOB prices soared to US$230 per cu.m for regular logs and to US$200 per cu.m for small logs.

Plywood industry groups hold meeting in Kuala Lumpur
A regular meeting between plywood industry groups of Japan, Indonesia and Malaysia was held at Kuala Lumpur, Malaysia, reports JLR. At previous meetings, the market situation in Japan and supply situations in producer countries were the main topics. During this meeting, the main issue discussed was on increasing the production of plywood using environmentally friendly raw materials and on evolving markets for these products. Suppliers also expressed the need to expand markets, rather than depending heavily on the Japanese market.

Participants agreed on the importance of sustainable production, and in this regard Indonesia and Malaysia are following the eco-plywood trend led by Japanese producers and increasing the production of plywood from plantation and certified wood.

Malaysian and Indonesian producers have begun to use acacia magnum and falcate for plywood production respectively. Both species are fast growing plantation species. According to Indonesian and Malaysian representatives, native natural forest species such as meranti, kapur and keruin are only sourced from sustainably managed forest units.

The Japanese plywood industry groups reported that despite the fact that more than 80% of plywood produced in Japan are made of native softwood like cedar and larch, it is important to have plywood made from environmentally friendly raw materials from Southeast Asia.

Japanese representatives also pointed out that the Japanese government’s policy of increasing the use of domestic wood to 50% of the total wood consumption, does not mean that imported wood will be replaced by domestic timber. Rather, the policy is set to boost the overall demand for both domestic and imported wood products.

The meeting reviewed the status of tropical timber supply from Indonesia and Malaysia to Japan. In Indonesia, there were 130 plywood mills exporting plywood products in 2006, while in 2009 the number of mills was only 31. The monthly production is currently around 200,000 cu.m of plywood.

During the first half of 2010, Indonesian exports of plywood totalled 73,000 cu.m. The major markets for the Indonesian plywood were Middle East and China while 18% of the total export volume was exported to Japan.

Malaysia imposes a log export quota at 40% of the total log production of around 10 million cu.m per year for exports. In August this year, log exports from Malaysia amounted to 2,71 million cu.m, up 19.7% compared to August 2009. Plywood export volume in August was 240,000 cu.m, a 6.9% increase over the same month in 2009. Out of the total plywood exports from Malaysia, 47% was exported to Japan.

Forest plantation area in Malaysia is currently more than 200,000 hectares and the government’s plan is to expand the area up to 1,000,000 hectares by 2020. As a result, the supply of plantation wood to Japan is expected to grow.

Greater use of eco-materials in flooring
Tostem Corporation announced its strategy “Environmental Commitment 2015” in July. According to this strategy, Tostem Corporation will shift to eco-materials in flooring manufacturing in 2011. It also plans actions towards changing the raw materials used for doors, cabinets and stairs to eco-materials.

According to JLR, Tostem has begun marketing two eco flooring products: ‘Ecohard 12’ with the base board made of wood chips from waste wood and ‘Harmonious light 12E’ with the base board made of falcate plantation wood.

‘Ecohard 12’ was introduced to the markets in December 2009 while ‘Harmonious light 12E’ in September 2010. Tostem is said to have increased the use of eco-materials in its production to 70% with these recently introduced products. The balance is medium and high grade flooring with plywood face from natural forests, but this will also be replaced by eco-materials in 2011, with plantation wood being the most likely material.

Daiwa House adopts wood procurement guidelines
Daiwa House Industry Co., Ltd. (Osaka) has adopted wood procurement guidelines in order to implement its biodiversity action plan. Daiwa House’s wood consumption totalled 250,000 cu.m in 2009.

According to the guidelines, wood products to be procured must be certified by recognised schemes. The guidelines also recommend the utilisation of recycled timber products such as particleboard and wood products.

OSSB for the Japanese market
AD World Co., Ltd. (Tokyo) is marketing OSSB (Oriented Structureal Straw Board) in the Japanese market for flooring base boards and as alternative to plywood and furniture materials. OSSB uses straw as raw material which is normally burnt after harvest of wheat or used to fertilize fields, thereby generating greenhouse gas emissions. OSSB is said to be a more environmental option for the use of straws.

In the Japanese market the product is called ‘Harvest Panel OSSB’ and it has been produced in Shaanxi Province China since November 2009.

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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  Plywood grades. Letter(s) on the left indicate face veneer(s), those on the right backing veneer(s). Veneer grade decreases in order B, BB, C, CC, etc. MBF           1000 Board Feet          
              Plywood   MDF           Medium Density Fibreboard
BF         Board Foot F.CFA         CFA Franc        
Sq.Ft     Square Foot  PHND             Pin hole no defect grade
Hoppus ton     1.8 cubic metres              Price has moved up or down

Source: ITTO'  Tropical Timber Market Report

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