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International Plywood and Veneer Prices 

16-30th September 2005


International Plywood and Veneer Prices

INDONESIA 

Doubled fuel prices in Indonesia

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). 

The 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.

 The fuel price increases are expected to have a knock-on effect on the price of everything from commodities to processed products, including timber products. Production costs in Indonesian plywood mills are being pushed up by soaring diesel oil prices which have made the use of power generators expensive.
 

The 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 country. 

US waives 8% duty on Indonesian plywood

The 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. 

21mm filmed plywood hit by substitution

EUWID 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 quality concerns. 

Indonesian exporters focusing on other markets

The 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. 

BRAZIL  

Hurricane Katrina blows Brazilian exports up

Concerns 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. 

Brazil 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 the USA. 

According 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. 

The 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 sectors capacity to respond to the short-term demand and new orders from the USA. 

Compensados Guararapes Co, Brazils 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 to US$280/m³. 

Recent 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. 

ITC evaluates import duty on Brazilian plywood

The US Department of Commerces 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. 

The 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. 

Rising prices for elliotis pine plywood

Prices 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.  

Prices 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. 

Plywood substitution continues in Europe

As 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. 

The 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.   

Importers 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. 

Veneer FOB

(Belem/Paranagua Ports)

      

White Virola Face 2.5mm

Pine Veneer (C/D)

US$ per m3

 

 

240

140

 

Plywood FOB

White Virola (US Market)

     5.2mm OV2 (MR)   

     15mm BB/CC (MR) 

 

White Virola (Caribbean market)

     4mm BB/CC (MR)   

     12mm BB/CC (MR) 

US$ per m3

 

390

350

 

 

480

380

 

Pine EU market

9mm C/CC (WBP)

15mm C/CC (WBP)

18mm C/CC (WBP)

US$ per m3

270

260

255

Plywood mills still producing below capacity

Despite 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. 

Personnel lay-off of in Mato Grosso

In the State of Mato Grosso, the crisis faced by the solid wood sector, a consequence among others of the governments 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. 

Curupira operation affects wood exports in July

As 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. 

Wood 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). 

MALAYSIA  

Dull Japanese market reins in prices

Malaysian plywood mills are attempting to raise export prices due to rising log prices but actual settled prices are weakening because of the stagnant Japanese plywood market. 

MR Grade BB/CC FOB

2.7mm

3mm

9mm & up

US$ per m3

410-415

390

325-335

 

GHANA 

Rotary Veneer

Euro per m3

 

Bombax

Chenchen

Kyere

Ofram

Ogea

Otie

Ceiba

Mahogany

CORE (1-1.9mm)

325

325

325

325

325

325

270

425

FACE (Below 2mm)

360

360

360

360

360

360

300

460

The above prices are for full sized panels, falling sizes minus 15%. Thickness below 1mm would attract a 5% premium. 

Rotary Veneer

Core Grade 2mm and up

       Ceiba

       Chenchen,Ogea & Essa

       Ofram

US$ per m3

 

235

295

305

 

Sliced Veneer

Euro per m2

 

Afromosia

Asanfina

Avodire

Chenchen

Mahogany

Makore

Odum

Face

1.19

1.25

0.92

0.72

1.03

1.01

1.54

Backing

1.00

0.80

0.60

0.50

0.70

0.60

0.95

 

Plywood, FOB

Euro per m3

Redwoods B/BB

4mm

6mm

9mm

12mm

15mm

18mm

 

Light Woods B/BB

4mm

6mm

9mm

12mm

15mm

18mm

WBP

560

340

315

300

310

300

 

WBP

500

335

290

270

280

245

MR

460

310

290

280

285

275

 

MR

330

270

255

235

245

235

Grade AB/BB would attract a premium of 5%. BB/BB would be 5% less, C/CC 10% less and CC/CC 15% less. 

PERU

Peru sees steady growth in wood exports

Peruvian 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 logging. 

HS 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%.  

The 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 market.  

The 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%). 

FOB for Mexican Market

 

Copaiba, 2 faces sanded,

     B/C, 15x4x8mm

Virola, 2 faces sanded,

     B/C, 5.24x8mm

Lupuna, treated, 2 faces sanded

     5.2x4x8mm

Lupuna plywood

     B/C 15x4x8mm

     B/C 9x4x8mm

     B/C 12x4x8mm

     C/C 4x8x4mm

US$ per m3

 

 

360-370

 

405-413

 

350-360

 

330-338

345-350

335-340

365-370

  

Veneer  FOB

Lupuna 3/Btr 2.5mm

Lupuna 2/Btr 4.2mm

Lupuna 3/Btr 1.5mm

US$ per m3

210-215

220-235

235-240

  

Domestic Plywood and Veneer Prices

 BRAZIL 

Rotary Cut Veneer

(ex-mill Northern Mill)

White Virola Face

White Virola Core

US$ per m3

 

190

159

 

Plywood

(ex-mill Southern Mill)

Grade MR (B/BB)

White Virola 4mm

White Virola 15mm

US$ per m3

 

 

617

456

 

MALAYSIA 

Meranti grade BB/CC Dom.

       3mm      

       12-18mm

US$ per m3

385-395

305-315

 

PERU 

Lupuna Plywood BB/CC

(Pucallpa mills)

     122 x 244 x 4mm

     122 x 244 x 6mm

     122 x 244 x 8mm

     122 x 244 x 10mm

     122 x 244 x 12mm

     122 x 244 x 15mm

     122 x 244 x 18mm

US$ per m3

 

454

444

431

418

423

420

484

 

Other Panel Product Prices

 BRAZIL  

FOB Belem/Paranagua Port

Export Prices

Blockboard

     Pine 18mm 5 ply (B/C)

 

Domestic Prices

Ex-mill Southern Region

Blockboard

     White Virola Faced 15mm

 

Particleboard (ex-mill)

     15mm

US$ per m3

 

 

360

 

 

 

 

420

 

246

 

MALAYSIA 

Oversupply chips off prices

The 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 consumption. 

Around 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 stream. 

Neighbouring 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. 

Malaysia, other Panels

 

Particleboard

     Export 12mm & up

     Domestic 12mm & up

 

MDF

     Export 15-19mm

     Domestic 12-18mm

US$ per m3

 

 

120-130  

120-135

 

 

210-215

195-200

 

PERU 

Peru, Domestic Particleboard

     1.83m x 2.44m x 4mm

     1.83m x 2.44m x 6mm

     1.83m x 2.44m x 8mm

     1.83m x 2.44m x 9mm

     1.83m x 2.44m x 12mm

US$ per m3

288

243

216

224

206

 

Prices of Added Value Products

MALAYSIA  

Rising timber exports to Gulf countries

Bernama 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. 

According 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). 

Based 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.  

Malaysia 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. 

Mouldings, FOB

Selagan Batu Decking

Red Meranti Mouldings

   11x68/92mm x 7ft up

       Grade A

       Grade B

US$ per m3

605-615

 

 

650-660

545-550

 

GHANA

Parquet Flooring 1st grade, FOB

10x60x300mm

       Apa

       Odum

       Hyedua

       Afromosia

10x65-75mm

       Apa

       Odum

       Hyedua

       Afromosia

14x70mm

       Apa

       Odum

       Hyedua

       Afromosia

Euro per m2

 

12.0

7.8

13.67

13.72

 

14.47

10.18

18.22

13.93

 

17.00

11.00

17.82

17.82

Grade 2 less 5%, Grade 3 less 10%. 

PERU 

Strips for parquet

Cabreuva/estoraque KD 12% S4S

     Asian market

Cumaru KD, S4S

     Swedish market

     Asian market

Cumaru decking, AD, S4S E4S

     US market

Pumaquiro KD # 1, C&B

     Mexican market

Quinilla KD, S4S 2x10x62cm

     Asian market

US$ per m3

 

1320-1380

 

610-625

570-590

 

750-800

 

465-480

 

570-580

  

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

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