Japan Wood Products
Dollar Exchange Rates of
10th June 2011
Japan Yen 80.37
Reports From Japan
Damaged plywood mills to restart soon
The Japan Federation of Plywood Manufacturers
Association is quoted as saying that six plywood mills
which sustained considerable damage as a result of the
recent earthquake and tsunami will restart partial
production, probably in July.
In Ishinomaki the power supply was restored late May but
in other areas, such as Miyako and Ofunato, it will be
some time before power supplies are resumed and this will
delay the resumption of production of mills in these areas.
The Association reported that April plywood production
was almost the same as in April last year. Mills that were
not damaged increased production to meet the emergency
demand for temporary housing in the quake and tsunami
Many mills in Japan had been running below capacity due
to weak demand so it was relatively easy for them to
Demand for plywood for emergency housing will soon
begin to slow say the Japan Lumber Reports (JLR). The
concern in the trade is now focused on prices rather than
on the supply.
Despite rising production costs domestic plywood mills
are trying not to increase panel prices any further in order
to stabilise the market.
Modest 2010 recovery in housing starts lifts log consumption
Statistics from the Ministry of Agriculture, Forestry and
Fisheries show that log consumption in 2010 was
23,724,000 cu.m, 4% up from 2009. Of this, domestic log
consumption was 17,193,000 cu.m, 3.5% up and
consumption of imported logs was 6,531,000 cu.m, 5.6%
higher than a year earlier.
The increase in log consumption is said by the JLR to be
due to the modest recovery in housing starts in 2010.
Notably, the consumption of domestic logs for plywood
was 2,490,000 cu.m, the highest on record.
The use of imported logs for plywood production
increased in 2010 by 17% while the utilization of domestic
logs for plywood manufacture grew by almost 26%.
Japanese grown cedar for off-shore plywood production
According to the JLR, Noda Corporation is considering
manufacturing plywood in Malaysia after its subsidiary
Ishinomaki Plywood suffered heavy damage during the
recent earthquake and tsunami.
The idea is to send cedar logs from Japanese forests to
Malaysia for processing and to then ship the plywood back
Noda has a subsidiary plywood plant in Sarawak, Sanyan
Wood Industries (SWI), with a monthly production
capacity of around 15,000 cu.m of concrete formboards
from tropical logs. Noda has been shipping all the
production from this mill to Japan.
Combination of factors pushing up tropical log prices
Hardwood log prices in Malaysia were firming for the past
12 months and began to rise sharply in the third quarter of
last year after log supply declined due to poor weather
which hampered logging operations in Sarawak and due to
strong demand from Indian importers.
In addition, in March this year, demand for logs in Japan
jumped as mills rushed to increase production to meet the
needs for construction of emergency housing for victims
of the earthquake and tsunami and thereby pushing up log
The weather in Sarawak has now improved and it has been
possible to resume normal logging although rafting is still
a problem. Demand from India has slowed as importers
there could no-longer bear the spiralling log prices.
The JLR reports that because of these changes FOB export
log prices are levelling off. However, plywood mills in
Sarawak need to replenish log stocks and secure logs to
meet current orders for plywood.
FOB log prices for Sarawak meranti regular in late May
were around US$360 per cu.m, unchanged from late April
prices. Small meranti prices are currently about US$330
and super small prices are US$310 per cu.m.
The JLR is reporting that in order to secure a full log cargo
some Japanese buyers have paid up to US$380 for meranti
regular. There are reports that some suppliers in Sarawk
are proposing higher prices having been encouraged by the
firm demand from Taiwan P.o.C.
Because of the high FOB prices, wholesale log prices in
Japan will exceed Yen 10,000 per koku CIF, which is the
highest level since the summer of 1993, says the JLR.
The JLR suggests that log FOB prices are unlikely to drop
in the near future which means that the mills in Japan will
eventually need to pass on the high log cost to consumers.
Level of plywood imports keeps rising
Export prices for Malaysian plywood are leveling off
despite the fact that suppliers still need to push the prices
up due to high log cost.
Malaysian 3x6 concrete formboard prices are currently
Yen 55,000 per cu.m C&F. Coated concrete formboard
panels are priced at Yen 62,000 per cu.m C&F. Structural
12mm panels are selling at Yen 56,000 per cu.m C&F,
both unchanged from levels in May.
Over the past weeks the wholesale price range in Japan
has been narrowing and the range between the high and
low price is now less than 100 yen per sheet. Concrete
formboard JAS 3x6 panel prices are Yen 1,200 per sheet
delivered, Yen 50 lower than in May.
Coated concrete formboard 3x6 panel prices are about Yen
1,300 delivered while structural 12mm 3x6 panel prices
are unchanged at around Yen 1,300 per sheet delivered.
Arrivals of imported plywood in April were 337,100 cu.m,
21% more than March and the level of imports seems to
Seasonally adjusted housing starts at a record low
Total housing starts in April were 66,757 units, 0.3% more
than April last year. Private owner units and units built for
sale both increased by 0.2% and 12.4% respectively but
units built for rent declined by 9.3%.
Despite the overall increase, seasonally adjusted annual
starts in April were just 798,000 units, the first time these
dropped below 800,000 units in nine months. The JLR
notes that there has been an immediate impact on starts
because of the earthquake in eastern Japan.
Housing starts in the three disaster hit prefectures of Iwate,
Miyagi and Fukushima, which suffered severe damage
caused by the earthquake and tsunami, were down by 33%
in April after a 19% decline in March.
In the three major populated regions of Tokyo, Nagoya
and Osaka, Tokyo starts fell by 3.0%, Osaka starts
dropped by 7.9% and starts in Nagoya were down by