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Japan Wood Products Prices

01-15th December 2010

Japan Wood Products Prices

Dollar Exchange Rates of  15th Dec 2010

Japan Yen 83.44

Reports From Japan

 Imported log prices trending upwards
Prices of logs have been climbing during the whole year due to active buying from Indian traders in Sarawak and Chinese traders in Sabah. Especially for kapur and keruing logs in Sabah, supply was short of demand, driving prices up. In addition, Vietnam and Pakistan are joining the market pushing up demand. The rainy season is expected to further curtail log supply, reports the Japanese Lumber Reports (JLR).

According to the JLR, log shortages at the ports in Malaysia are severe and many ships are waiting for cargos. This, in turn is driving up demurrage and total shipping costs. Shipping companies are now asking US$47-48 per cu.m, up US$1 per cu.m from November. According to importers, loading time is normally one week, but due to log shortages it is currently 10-14 days.

In Sabah, log export prices at Tawau port for mix serayah logs are at US$230-235 per cu.m FOB, up US$5-7 per cu.m from November. White serayah log prices fetched US$250 per cu.m FOB. Kapur prices gained US$5 per cu.m from a month ago to US$275-280 per cu.m FOB, while keruing log prices jumped US$20 per cu.m to US$260 per cu.m FOB. Keruing log prices for sawnwood (70-80 cm & up) fetched US$275-285 per cu.m FOB.

In Sarawak, meranti regular log export prices at Tanjonmani port are at US$245 per cu.m FOB, gaining US$10 per cu.m from a month ago and US$65 per cu.m (up 27%) from the beginning of the year. Small meranti prices are at US$210 per cu.m FOB, up US$70 per cu.m (up 34%) from the beginning of the year, however, current asking prices are closer to US$215 per cu.m. Kapur log prices are at US$300 per cu.m FOB.

According to JLR, the Japanese market for hardwood logs is firming after frenetic buying due to the strong Yen in recent months. In addition, some manufacturers have been rebuilding their stocks ahead of the rainy season in producer countries. Currently, the appreciation of Yen has eased but CIF prices have trended upwards since early November.

Plywood mills in Japan utilising imported tropical hardwood logs have maintained their reduced production levels at around 70% of full capacity for more than a year.

In Japan, CIF prices gained Yen 100 from November to Yen 7,200-7,300 per koku for Sarawak meranti regular logs and to Yen 6,100-6,200 per koku for small meranti logs. Super small meranti log prices stood at Yen 5,800-5,900 per koku, unchanged from November.

Sharp fall of plywood imports from Malaysia
According to JLR, plywood consumption in Japan during October was 452,600 cu.m, down 8.9% from October 2009, and 9.4% less than recorded in September 2010.

October plywood imports amounted to 223,800 cu.m, the lowest level this year and around 40,000 cu.m less than the monthly average during 2010. The major cause for the overall fall is that plywood imports from Malaysia plummeted 42% compared to October last year. According to JLR, the main factors for the curtailed plywood supply are the log shortage and the appreciation of Malaysian currency against the US dollar.

However, October plywood imports from Indonesia amounted to 72,000 cu.m, up 20.4% compared to October last year.

October housing starts improving from last year
Total housing starts in Japan during October were 71,390, up 6.4% from October last year. The number of housing starts has increased for the fifth consecutive month this year, reports JLR. However, October 2010 starts are still the second lowest ever recorded for the month of October. Owner’s units and units built for sale showed some increases compared to last year, but housing starts for rental units fell.

The seasonally adjusted housing starts fell from September 2010 by 2.9% to 813,000 in October 2010. Wood frame units were up by 5.3% over October last year and these constituted about 57% of the total housing starts in October 2010.

Forest Revitalisation Plan finalised
JLR reports that the Ministry of Agriculture, Forestry and Fisheries has finalised the Forest Revitalisation Plan to be implemented from the beginning of 2011. The plan will be renewed every five years.

Under the plan, the committee of performance and management, as well as four research committees will be established covering the fields of logistics, reformation of forest associations in promotion of forestry, training and education, processing, and marketing and utilisation of domestic forest resources/timber.

According to the plan, 2,000-3,000 foresters, 2,000 forest business planners and 5,000 forest managers will be produced during the next ten years. In promoting the use of domestic forest resources, forest management plans and reforestation activities will be required from 2012 onwards. Low cost production and consolidation of the forest sector will be promoted according to the plan

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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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