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Japan Wood Products Prices

01-15th October 2011

Japan Wood Products Prices

Dollar Exchange Rates of  15th October 2011

Japan Yen 77.26

Reports From Japan

  Active Asian demand for tropical logs halts slide in log prices
Tropical log prices quoted for the Japanese market, which
had been falling since June, have leveled out says the
Japan Lumber Reports (JLR). This, says the JLR, is
because buyers in India and Taiwan P.o.C have become
more active in the market.

Tropical log suppliers in Malaysia have become more
bullish and are moving to raise prices across the board.
Meranti regular log FOB prices are up by US$10 per cubic
metre FOB compared levels in August.

The JLR reports that current price quotes are at US$275-
320 per cu.m FOB for regular Meranti logs. Prices for
small and super small Meranti logs have also moved up by
around US$5 per cu.m.

In a reaction to the latest round of increases Japanese
buyers suggest that US$300 per cu.m FOB for Meranti is
just too high for this market and that at this price the
consumption of tropical logs in Japan will start to decline.

In the producer regions in SE Asia the rain season is
approaching so log supplies will fall again over the next
few months and this shortage will result in further price
increases in the short term.

In the wholesale market in Japan Meranti regular log
prices recently peaked at Yen 10,000 per koku but the
combined effect of weakening FOB prices and the
appreciation of the Yen, the prices are now 9,200-9,300
yen per koku CIF.

Bad weather in PNG and Solomon Islands hampering harvesting
The JLR is reporting that bad weather is hampering
harvesting in Papua New Guinea and the Solomon Islands
and that log stocks have fallen.

China is the dominant buyer of logs from these two
countries and Japan cannot compete for logs from the
region as wholesale log prices in Japan continue to fall.

Plywood mills in Japan shift to softwoods as tropical
log prices too high

Most of the tropical logs imported into Japan are used for
the manufacture of plywood. At the moment the market
for hardwood plywood is extremely poor and mills are not
able to make a profit with log prices at current levels.

As a result mills have stopped manufacturing unprofitable
lines such as tropical hardwood structural and concrete
formboard panels and have shifted to producing more
softwood plywood.

Five consecutive monthly increases in housing starts recorded
Total housing starts in Japan during August were 81,986
units, 14% more than the same month a year ago report the
JLR. This represents five consecutive monthly increases. It
was found that monthly housing starts were over 80,000
units for two straight months.

Japan Forestry Association offers suggestions for revising taxes
Groups within the Japan Forestry Association recently had
the opportunity to present suggestions for revising the tax
structures for forestry and forest industry enterprises.

To promote revitalisation of the forest and forest industry
sectors the Association submitted the following

• Establish a new tax system to promote
  maintenance of the forest and utilisation of wood.
• Establish a new structure for payment of
  inheritance and gift taxes.
• Set up a tax exemption or refund measure on
  taxes imposed on oil and coal.
• Extend the reduced tax on light oil transaction
• Expand the special tax measure on business
  office tax.
• Reduce the property tax.
• Reduce income tax on forest revenue.
• Extend the reduction on income and corporate
• Reduce consumption tax on wood trading.

Japanese house builders increase use of laminated
lumber for posts and beams

The Japan Forest Products Journal has once more
surveyed house builders on their use of wood products. In
its thirteenth survey of 61 house builders it was found that
the use laminated lumber for posts and beams has
increased further.

Overall it was found that the use of laminated lumber for
house post amounted to 72%, which is close to the record
use found in 2002. For beams the use of laminated lumber
was found to have increased by 10% bring overall use
across the industry to 69%.

The use of laminated lumber for use as sills was found not
to have changed since the last survey.

Related News:


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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