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International Plywood and Veneer Prices
fuel prices in Indonesia
has raised fuel prices by an average of 120% on 1 October amid protests. One
litre unleaded petrol rose from 2,450 Rupiah (US$0.24) to 4,500 (US$0.44)
while 1 litre kerosene rose from Rp700 (US$0.07) to 2,000 (US$0.20).
price hike was designed to cut Indonesia's massive fuel subsidy bill (US$14
billion a year, about a third of central government expenditure) and help
balance its budget. Although Indonesia is the only Asian member of OPEC, it
is a net importer of oil, which means it spends millions each day to import
oil products to feed soaring domestic demand.
government has promised to pay Rp100,000 (US$10) to each of the more than 15
million poor households with
an individual monthly income of less than Rp175,000 (US$ 17.5) as
compensation for the fuel price increase. The money will be disbursed
through post offices and branches of Bank Rakyat Indonesia (BRI) across the
waives 8% duty on Indonesian plywood
US government has granted Indonesian plywood (HS 4412.13.40) a waiver for
duty-free treatment under the Generalized System of Preferences (GSP) as of
July 2005. This cover plywood of wood sheets, each ply not exceeding 6mm
thickness, with at least one outer ply of tropical wood. This product had
previously been subjected to an 8% duty.
filmed plywood hit by substitution
has reported that demand in Europe has remained comparatively subdued in
recent weeks. A number of importers supplemented their range of Indonesian
plywood with Chinese substitute products with some individual importers even
halting the Indonesian plywood business.
As a result, Indonesian plywood grades continued to be substituted
with Chinese products in recent weeks.
Hardest hit were 21mm filmed plywood grades.
In this market segment, Central European buyers are now using
primarily Chinese products. Chinese
film/wire‑mesh plywood is also increasingly being contemplated as an
alternative to Indonesian products. However,
opinion about the usability of Chinese 4mm filmed plywood vary due to
exporters focusing on other markets
availability of Indonesian plywood grades, particularly of high qualities or
specialities, remains tight in Europe. Several Indonesian manufacturers are
reported to be focusing on other more interesting markets while some
companies have even given up doing business with Europe.
At the same time, further reduction in Indonesian production
capacities was affecting availability.
Production had ceased not only at a number of small mills but also
larger plants with a capacity of more than 20,000 m3 per year.
However, Indonesian manufacturers still have large stocks of all major
grades for buyers to resort to.
Katrina blows Brazilian exports up
over short-term supply shortages in the aftermath of Hurricane Katrina
prompted some US wood products importers to fulfill immediate needs with
imports. As a result, new contracts with Brazilian exporters have increased,
causing a rise in price of pine plywood, the main exported product of the
Brazilian forest sector. Prices have climbed by 20-21% despite the 8% import
duty in effect in the USA.
accounts for 40% of the plywood used in civil construction in the Eastern US
region affected by the hurricane. Reconstruction work is forecast to begin
in October‑November, but high demand has already pushed the prices of
the Brazilian plywood up. The price hikes have initially benefited Brazilian
companies with significant plywood stocks stored in ports and warehouses in
to the Brazilian Association of Mechanically-Processed Wood (ABIMCI), the
forecast of plywood sales to the USA was increased as a result, from 800,000
m³ to 1 million m³ in 2005, as compared with a total 971,200 m³
exported in 2004.
high demand has taken many Brazilian timber companies by surprise that had
drastically reduced production level, laid-off staff and even closed some
operations in the past few months due to rising raw-material costs and the
strength of the Brazilian currency. This has reduced the sector¡¯s capacity
to respond to the short-term demand and new orders from the USA.
Brazil¡¯s largest pine plywood exporter, has already committed to the USA
all of its future plywood production (60,000 m³ per month) for 2005. As
the price is paid at delivery time, Brazilian exporters expect to benefit
from the price increases. Masisa do
Brasil, a Chilean company located in Southern Brazil which exports OSB
for packing and civil construction, has seen a price increase of US$7 per m³
estimates have pointed out that the forests damaged by Katrina in the States
of Mississippi, Louisiana and Alabama cover an area of 12.85 million ha
(about 5.4 billion m³), equivalent to two years of harvesting (60%
softwoods). Part of this volume will likely affect the domestic and exports
supply and demand balance of forest products.
evaluates import duty on Brazilian plywood
US Department of Commerce¡¯s International Trade Commission (ITC) launched
an evaluation of the generalised system of preferences (GSP) affecting the
import duties on Brazilian softwood plywood which have been levied 8% since
2 July 2005 alongside import restrictions on other products in
mid‑August 2005. The evaluation will determine the potential impact of
waiving the 8% import duty on the US plywood industry.
ITC carried out a public hearing on this subject on 29 September 2005. A
final report will be submitted to the US Trade Representative by 10 November
and a public release is expected later this year.
prices for elliotis pine plywood
for Brazilian elliotis pine plywood have increased substantially during
recent weeks. Customers in the
USA and Europe are now quoting much higher prices than at the end of August.
Prices for grades certified for the US market, in particular, climbed at
short notice. FOB prices for 18mm CDX, the most important grade sold in the
USA, was quoted at US$340 per m3, up
from around US$235 per m3.
for 20mm C+/C for Europe were raised to US$305-310 per m3 up from
US$275‑280 per m3. Grades delivered to Europe sell on
average US$10‑15 below the US price. Brazilian manufacturers are
unlikely to make price concessions during upcoming negotiations with
European buyers due to the price difference between USA and Europe.
Brazilian manufacturers are refusing to supply at lower prices as earnings
are still strained by rising costs and a strong Brazilian real.
substitution continues in Europe
Chinese plywood continues to replace tropical plywood in Europe, the product
range of Chinese filmed plywood grades has diversified.
Filmed poplar plywood, which replaces Brazilian and Indonesian
products, is still the most important filmed plywood grade. Since last year,
filmed combi-plywood from Brazil has lost ground in Europe.
substitution of Indonesian filmed plywood has gathered pace this year.
In general, the price difference between Indonesian
film/wire‑mesh plywood and Chinese substitute products is
comparatively small. Accordingly,
there are other reasons for the substitution of Indonesian products with
Chinese wire‑mesh plywood. One
buying motive is better transport logistics provided by Chinese container
shipping compared with the shipping of bulk loads prevailing in Indonesia.
had increasingly switched to low-priced Chinese products last summer, due to
rising prices for Central European producers. Prices of US$360‑370 per
m3 CNF were quoted most recently for 21mm film/film poplar
plywood, filmed with 120gr. per m2 western phenol films. Similar
grades filmed with 200 gr. phenol films made in China or Korea remained on
average US$15-20 per m3 below that level.
mills still producing below capacity
recent price gains, Brazilian plywood mills¡¯ earnings are reported to
remain under strain, due to the strengthening of the Brazilian real and
rising log and glue costs. Consequently, many manufacturers are reported to
be producing at 60%‑70% capacity in recent months. In spite of the
recent price increases, several buyers have indicated that most mills have
not increased production waiting to see how demand and prices develop.
Increasing production capacity would take time.
lay-off of in Mato Grosso
the State of Mato Grosso, the crisis faced by the solid wood sector, a
consequence among others of the government¡¯s crackdown on illegal logging
(Curupira Operation), has been accentuated by the suspension of the
Authorizations for Transportation of Forest Products (ATPF's) by IBAMA. This
has prompted the lay‑off of hundreds of employees, mostly in the
Northern region of the State, in the past few months. According to a recent
appraisal by CIPEM (Centre of Wood Producers and Exporters of Mato Grosso),
50% of the solid wood producers have reduced their industrial operations.
operation affects wood exports in July
a result of the arrest of illegal loggers and intervention on illegal
sawmills (Curupira Operation) in
Mato Grosso in June 2005, the exports of wood product fell 25% in July 2005
in comparison with July 2004 (down 15% in comparison with June 2005). The
sector is the third most important in Mato Grosso in export value terms and
accounts for over 60% of exporting companies. Last year, 100 out of the 273
exporters were lumber companies.
products exports are forecast to continue declining in Mato Grosso based on
recent trends, although exports of solid wood products reached US$ 111.6
million in the year to June as compared to US$104.7 million in the same
period of 2004. Mato Grosso was the fourth largest wood products-exporting
State in 2004 (up from fifth in 2003) after Paran¨¢ and Santa Catarina (in
Southern Brazil) and Par¨¢ (in the Amazon region).
Japanese market reins in prices
plywood mills are attempting to raise export prices due to rising log prices
but actual settled prices are weakening because of the stagnant Japanese
above prices are for full sized panels, falling sizes minus 15%. Thickness
below 1mm would attract a 5% premium.
AB/BB would attract a premium of 5%. BB/BB would be 5% less, C/CC 10% less
and CC/CC 15% less.
sees steady growth in wood exports
wood and wood products exports continue to grow and are expected to exceed
US$150 millions in 2005. By July 2005, wood exports reached US$ 96.152
millions, up 33% from 2004. The Peruvian forestry sector works under the
forestry concession scheme which promotes sustainable forest management. The
government and the private sector are working together to combat illegal
4407240000 (mahogany and virola sawnwood) was the leading export category in
the year to July, accounting for 40% of total exports, up 48% from the same
period in 2004. HS 4407290000 (other sawnwood like Spanish cedar, Peruvian
walnut, etc.) ranked second, with 14% of the exports. HS 4409201000 (blanks
and friezes of hardwoods such as cumaru, masaranduba, ipe, cabre uva, jatoba,
etc.) was in third place with 11% of the exports, up 59%.
increased FOB value for plywood in 2005 was mainly a consequence of oil
price hikes. Plywood and veneer entrepreneurs have been forced to adjust
prices. This has affected their price competitiveness in the international
USA (44% of the total exports) is still the main market, followed by Mexico
(33%), China (9%), Italy (2%) and Hong Kong S.A.R. (2%).
Plywood and Veneer Prices
Panel Product Prices
chips off prices
chipboard market in Malaysia is currently experiencing some oversupply.
As a result, prices for the common chipboard grades fell to lows not seen
for a long time. Chipboards in Malaysia are mainly used for the manufacture
of case goods, office furniture, speaker boxes, packaging boxes and others.
Case goods and office furniture account for a high percentage of total
600,000 m3 of chipboard is consumed annually by Malaysian
manufacturers. Local production is estimated at around one million m3
per year with some 300,000 m3 in annual capacity coming on
Thailand is also experiencing a significant increase in installed chipboard
capacity. In view of its proximity, chipboards from Thailand are also
entering the Malaysian market, contributing to the current deterioration of
chipboard prices. Ample supply is also seen in Thailand and Indonesia.
of Added Value Products
timber exports to Gulf countries
news reported that by the end of this year, export of timber products from
Malaysia to the Gulf Cooperation Council countries (GCC, Saudi Arabia,
United Arab Emirates, Qatar, Kuwait, Bahrain and Oman) is expected to reach
US$272.7 million, up 13% from 2004.
to the Dubai-office of the Malaysian Timber Council (MTC), exports to GCC
countries accounted for 73% of Malaysia's total timber exports to West Asia
including Yemen, Syria, Jordan and other smaller markets in 2004. The
biggest GCC market for Malaysian timber products in 2004 was the UAE
(US$130.2 million, up 38% from 2003), followed by Saudi Arabia (US$59.3
million), Kuwait (US$29.3 million), Bahrain (US$12.6 million), Qatar (US$6.7
million, up 27%) and Oman (US$3.2 million).
on the first quarter figures of 2005, MTC projects that timber exports to
West Asia could climb 18% from US$333.7 million in 2004 to US$393.4 million
in 2005. The sharpest increase in demand for Malaysian timber products was
seen in Jordan, where the value of exports jumped 96% to US$39.8 million in
2004 from US$20.3 million in 2003.
exported a total of US$5.2 billion worth of timber products worldwide in
2004. Figures for the first half of 2005 showed a 14% increase compared with
the same period last year. According to the Malaysian Timber Industry Board
(MTIB), exports are set to surpass the total recorded last year.
2 less 5%, Grade 3 less 10%.
CopyRight 2005 Global Wood Trade Network. All