Japan Wood Products Prices
1-15th June  2004

Japan Wood Products Prices

Dollar Exchange Rates of  11th June  2004

Japan Yen 110.05 

Report From Japan

End Year Results   

Major Japanese building materials wholesalers have closed their books for the 2003-2004 business year that ended in March. All enjoyed increased sales revenue and profit as a result of the rush-to-buy which began late last year as consumers moved to take advantage of tax break measures on housing loan interest.  

Analysts from the Japan Lumber Report say shipments of F 4star building materials to remedy the so-called 'sick house syndrome' increased. Nice Corporation's sales of house building materials, which accounts for 70% of its total sales, was reported as up by 9.4% to Yen 181.1 billion. Also, company sales in western Japan increased by 75% to Yen 14.8 billion driven by various promotional fairs.

Japan Kenzai Co., Ltd. recorded an increase in revenue and profit. This company maintains it top position in terms of housing materials sales by aggressive business tie-ups and mergers with other companies.

Jutec Corporation's performance reflects the effect of business cooperation and revenue is reported as Yen 140 billion which is said to have yielded a consolidated profit of about Yen 1 billion. 

The Japanese government has introduced plans to increase procurement of wood products through a revision of basic plan to promote procurement of environmentally friendly items under the law 'Green purchase' which was enacted in March.  The Ministry of Land, Infrastructure and Transport disclosed the new procurement plan for the public works in 2004.

Under the plan, twelve new items are added for procurement. For wood products, four items; lumber, laminated lumber, plywood and LVL are added with certain conditions. Lumber must be produced out domestic thinnings, leftover logs or small diameter logs.  

Laminated lumber, plywood and LVL must be made out of thinnings or waste wood produced in sawmills and plywood mills and such materials must be over 10% in volume in the final product. For interior use, formaldehyde emission standards must be less than 0.3 mg/lrer and the maximum shall not be higher than 0.4 mg/litre.  

Before this revision, the purchase list included recycled wood products such as particleboard, fiberboard, wood cement composite board and small diameter thinning logs. In 2002, actual procurement was 44,591 cubic metres of small diameter logs, 385,163 square meters of particleboard, 100,664 square meters of fibreboard and 58,963 square meters of wood cement composite board.  

New housing starts  

April housing starts were just above 96,000 units, which is the first decline in five months. The Ministry of Land, Infrastructure and Transport commented that such a decline could be temporary and that it is too early to say that the steady improvement in housing starts has changed.  

Seihoku raises plywood prices  

As of May 20, plywood manufacturers in the Seihoku group have raised the prices for 12 mm structural softwood panel (F 4star category 1) by Yen 20 yen per sheet to Yen 920 per sheet delivered Tokyo. Prices of 12 mm 3x6 tropical hardwood concrete formboard plywood panels are up by Yen 30 yen per sheet to Yen 950 yen.

 Prices have been pushed up by rising production costs, especially by increased log and adhesive costs. Mill inventories are reported low and demand is expected to increase towards the end of June so the manufacturers are active, particularly for thick softwood panels. The demand for imported plywood is also reported by the JLR as firm. Prices for concrete formboard F 3star are up by Yen 20 yen per sheet to Yen 900 and non-JAS panel prices are up by Yen 20-30 to Yen 770-780 per sheet.  

Tropical Log Market Trends 

Japanese importers are asking for higher prices from end-users. Sarawak Meranti regular logs are priced at Yen 6,200-6,300 yen per koku CIF, Yen 500-600 higher than in early May and some Yen 900-1,000 higher than late February prices.  

Plywood mills have finally agreed to accept a Yen 300-400 per koku increase but say a price hike of Yen 500 yen is too much too soon because plywood prices are not going up that fast.  

For the importers, last month's purchase prices translate to a Yen 300-400 yen per koku increase in wholesale prices so they are desperate to pass the cost on to their customers. 

For small and super small logs, normally contracts between Japanese plymills and importers are made ahead of actual shipments, but plywood mills now complain that when the logs arrive the prices asked by importers is too high. The Japanese mills realize that the importers are losing money and only the exporter is benefiting.  

The log production is reportedly improving in SE Asia but active demand for logs by Malaysia processors is supporting a high level of FOB prices.  

Keruing prices have just about peaked at about US$195-200 per cubic metre driven up by Indian buyers.

Logs For Plywood Manufacturing       

For more information on the Japanese market please

see www.n-mokuzai.com

Source:ITTO