Japan Wood Products Prices
1-15th October  2004

Japan Wood Products Prices

Dollar Exchange Rates of  8th Oct.  2004

Japan Yen 109.48 

Japan's wood imports 

For the first half of the year, Russia accounted for 49% of the log imports by Japan. Import volumes for both logs and sawnwood in the first half of this year increased slightly compared to the same period of last year. Imports of logs from Russia were up 15% and sawnwood imports from Russia also jumped by nearly 20%. 

Total amount value of log and sawnwood imports in the first half was Yen 284.9 billion  (approximately US$2.6 billion). The total volume of log imports was 6,850,000 cubic metres, 2.5% up on the same period last year at Yen 112.9 billion (+ 11.6%). The increase in the value of imports was, says the Japan Lumber Report, attributed to the considerable higher prices for Russian, North American and New Zealand logs during the period. 

Plywood imports 

The latest figures show that the total plywood supply in Japan in July (domestic and imports) was 720,000 cubic metres, 6% more than June and 11% more than July last year. At 720,000 cubic metres the July figures better the highest level for this year which was recorded in April. Imports of  plywood have been above 400,000 cubic metres for four months now. 

Domestic production of softwood plywood in July almost reached the previous high of 584,000 cubic metres recorded in September 2003. July imports of plywood were 448,000 cubic metres, 9.2% more than June and 14.3% more than July last year. This is the second largest monthly volume after the 452,000 cubic metres imported in January this year. The JLR suggests that log supply in Indonesia and Malaysia has temporarily increased so that the supply of plywood is increasing. 

The improving supply of imported plywood is impacting prices and the market for commodity items like 12 mm panels is reportedly softening. In addition analysts have observed a weakening of prices for thin and medium thin standard panels.  

Some importer did comment that they have been trying to hold up prices of imported thin and medium thin panels but after some importers increased imports and put more panels on the market, then prices started to slide. 

Prices for Indonesian JAS concrete forming 3x6 panels C&F are down around US$5-10 compared to a month ago and this has caused producers to resist any prices.  

Cleanup JV in China 

Cleanup Corporation plans to establish a joint venture company for manufacturing and marketing system kitchens in Shanghai, China. Actual start-up is expected in January 2005. Cleanup will invest 51% and local kitchen makers the balance and the total investment will amount to Yen 280 million.  

Up until 2007, the company will reportedly lease existing plant in Shanghai to hold down manufacturing cost and develop markets. All the products will be sold in China and the target is rapidly growing wealthy families so that the products will be high quality'. The marketing plan is for the sale of 1,000 sets of system kitchen in 2005.

Tropical Log Prices Weaker 

Reflecting weaken FOB prices in Sarawak, there is rising from mills on Japanese importers to reduce log prices. About a year ago, FOB prices for Meranti regular were below USUS$130 but this had increased to a high of nearly USUS$160 during this summer.  

Now that FOB prices are weakening the endusers in Japan are putting strong pressure on importers to lower wholesale prices. The importers however, are unwillingly to lower prices. Currently wholesale prices are about Yen 6,100-6,150 per koku CIF which is Yen 50-100 lower than in late August. Small Meranti prices are also down by Yen 100-150 at Yen 5,500-5,600. Kapur prices are also easing to Yen 6,700- 6,800, a drop of Yen 50. 

FOB prices have been easing since late September. Current FOB prices of Sarawak Meranti regular (SQ up) is US$152-153 per cubic metre, about US$3 lower compared late August. Meranti FOB was expected to go below US$150 but is seen as holding above US$150 at the moment.  

Sabah FOB prices remain unchanged and FOB prices from exporters in the southern part of PNG is firm due poor weather which has hampered logging. Shipping availability from PNG is reportedly tight because of a lack of inbound cargoes to PNG.  

Some shipping companies are quoting US$50 per cubic metre with one port loading and two ports discharging on full load basis. For Sarawak the freight rate is about US$33 per cubic metre. Due worldwide shortage of oil a further increases in freight rates is forecasted after November. 

Europeans dominate OSB imports  

The share of European manufactured OSB in Japan's total import of OSB has climbed sharply. Total import of OSB for the first half this year were121, 625 cubic metres, 31% higher than in the same period last year. Once dominant North American imports dropped sharply after many suppliers gave up on the export market because of a booming US domestic market. Main N. American supplier now is Ainsworth. 

There are JAS certified structural OSB plants in Europe and supplies are coming from three main sources, Egger and Kronotex (Germany) and Kronopol (Poland) which is steadily increasing its share of the market. Since the market prices of OSB in North American market remain high, it is unlikely that exports to Japan will increase so the market will be dependent on European suppliers. 

More competition for plywood  

Japan Novopan in Osaka prefecture has acquired approval for their structural particleboard from the Minister of Land, Infrastructure and Transport allowing its use in load bearing walls for traditional Japanese wooden post and beam houses. With this approval, Novopan's particleboard can be used as wall panels for almost all types of housing. The company says its panels are price competitive with other wood based panel products. 

Novopan structural particleboard is reported as having higher strength and durability than structural plywood. Its shearing strength is reported as more than twice that of plywood and it is said to have a much higher load bearing strength than plywood. 

For more information on the Japanese market please

Abbreviations

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  Grade B faced and Grade C backed	MBF           1000 Board Feet
Plywood	MDF           Medium Density Fibreboard
BF         Board Foot	F.CFA         CFA Franc
Sq.Ft     Square Foot	Price has moved up or down

Source:ITTO