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Dollar Exchange Rates of 21th Jan. 2005
Japan Yen 102.73
Japan South Sea Lumber Conference (SEA), comprising the Japan Lumber
Importers Association, Japan North American Lumber Conference and the New
Zealand Sawmillers Conference of Japan, have presented projection of
demand for imported wood products for 2005. The demand for imported logs
and lumber for 2004 is expected to come in at plus 3% compared to 2003 but
in 2005 demand is expected to drop slightly.
2004, the demand increased as housing starts went up (+3% up from 2003).
In 2004, log imports increased by 2.8% but in 2005, log imports are
expected to drop back down to 2003 levels. In particular, Russian log
demand climbed by 800,000 cubic metres in 2004, especially for plywood
production, but Russian log imports are expected to fall by 370,000 cubic
metres in 2005.
lumber demand could continue to increase. Lumber demand in 2004 was up by
3.2% compared to 2003 and it is likely to move up further by 1.5% in 2005.
source, lumber imports from Russia, Europe and South Sea countries could
be higher while those from North America,New Zealand and Chile could be
lumber from Europe could reach 3mil cubic metres and from Russia could
jump to 900,000 cubic metres. Despite the strong Euro, which would hamper
further growth of demand in Japan, it is projected that the demand for
European KD products and lamina would remain firm for 2005.
raise log prices
production in SE Asia remains slow due to the rain season so FOB prices
have been inching up. Sarawak log prices started rising last November.
freight for Sarawak loading has been raised by US$1-2 per cubic metre
since December and Japanese log importers have been trying to pass on this
extra cost during January. For instance, for Sarawak meranti regular which
arrived in January the FOB price is ranging from US$153 to US$154 per
cubic metre, US$3-4 higher than the bottom prices and the freight is
US$34-35 per cubic metre.
an exchange rate of 105 yen per dollar, the import cost would be about Yen
6,000-6,100 per koku CIF.
costs for the same logs were Yen 5,850-5,950 so the importers need to up
prices by Yen 100-150 per koku. However, it is not an easy task to pass on
this difference but, because the log importers have been suffering losses
throughout last year so they are determined to cover their cost this year.
market price for meranti ise unchanged at Yen 5,100 per koku CIF and super
small is at Yen 4,800. Kapur prices are firm as FOB prices are up by US$5
since last December. The importers try have tried to lift prices to Yen
6,700-6,800 while the users' idea of prices are at Yen 6,500 per koku CIF.
FOB prices are gradually rising. Sarawak meranti regular FOB price is US$3
up at US$156-158 (SQ up) per cubic metre and the shippers' new offers are
now even US$2 higher. Kapur floater prices are up US$2 at about US$170 and
Keruing is over US$200 because of bullish demand from Indian importers but
this price is too much for the Japanese market.
movement of the market for plywood in the Tokyo area market can be
segmented into two. One is direct demand by house builders and the other
is traditional wholesale channels for retailers and contractors. At the
moment the former is much more active but contract durations are changing
from the previous quarterly base to a monthly base as the purchasers seem
more cautious at present.
the market for plywood is steady but appears weak according to the Japan
Lumber Report. Major plywood makers are holding steady the prices for 12
mm structural softwood panel F 4star(category 1) atYen 850 per sheet
delivered Tokyo area but some dealers are selling at Yen 830-840 without
any commission. Meanwhile imported JAS 3x6 concrete formboard panel prices
are weaker at Yen 850-860 per sheet delivered, despite a reported drop in
cost of future arrivals of this item could be lower because of the
strengthening Yen but the importers are very cautious in future commitment
so that any sudden rise in arrivals is unlikely.
JAS 3x6 concrete formboard panel prices are flat at Yen 920-930 but price
movement is slowing because of higher prices compared to imports and the
poor demand in Northern Japan as winter snow has disrupted building work.
only busy item according to the Japan Lumber report is non-JAS long
sheathing for DIY stores with the prices about Yen 750. The price movement
of thin and medium thin panels is centered on low priced B and C grade
items primarily for temporary construction.
prices of domestic thin 2.3 mm F 4Star (category 2) A grade are Yen 10
lower than a month ago at Yen 310-320 and 4 mm medium thin F 4Star
(category 1) A grade prices are flat at Yen 480-500.
2005 housing starts
Japan Forest Products Journal recently survey opinions on housing starts
for 2005 from major house builders and franchised house builder chains.
The result from 20 builders is 1,156,000 units, are likely for 2005 which
is a slight decline from the estimated 2004 starts of 1,167,000 units
disclosed by the Research Institute of Construction and Economy (RICE)
reason for the drop could be the scaled down tax break measures on housing
loans and slower than forecast growth in personal incomes.
19 builders forecast 1,156,000 units but estimates ranged widely from
1,145,000 to 1,240,000 units. However, the majority centered on a range of
1,150-1,170,000 units so a slight decline seems to be dominant opinion.
American log import by the area
of total North America log import in 2004 was 3,624,400 cubic metres, 2%
less than 2003. Looking at unloading ports, three ports of Kure, Matsunaga
and Matsuyama took 57% of total import while total volume unloaded at 24
ports in Eastern Japan was only 650 M cubic metres with the share of 18%.
High penalty of ocean freight for additional port call and small unloading
volume make it almost impossible for local deliveries.
largest port was Kure, where Chugoku Lumber is with the share of 35% or
1,236 M cubic metres. Second was Matsunaga with 15% share and the third
was Matsuyama with 7.5% share. Top three ports received 2,070 M cubic
metres with the share of 57%. This tells oligopoly by large sawmills
continues to progress and shakeout of smaller inland sawmills continue.
For more information on the
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