Japan Wood Products Prices

16-31th January 2006

Japan Wood Products Prices

Dollar Exchange Rates of  23th January  2006

Japan Yen 114.63

Report From Japan

Log price negotiations stall
Price negotiations on imported tropical logs between importers and domestic plywood mills
failed in December and carried over to late January. 

Plywood mills were resisting further log price raises. While importers are reported to be suffering financial losses, plywood mills have only been able to make a gradual increase of plywood prices.

Log importers asked ￥7,400-7,500 per koku CIF (1koku=0.278 m3) for meranti regular logs arrived in late November, while plywood mills offers were at about ￥7,200. The CIF price for logs arrived in December went further up to about ￥7,500-7,600 due to exchange rate fluctuations, but mills continued to resist the price hikes.

Log prices in production regions remain firm as the ongoing rainy season and Chinese New Year holiday hinder log production. Log inventories are decreasing and prices are edging up. Most offers for meranti regular are at $175-178 per m3 and even $182 per m3, while offers for meranti small are at $145-147 per m3. Prices for kapur and keruing are unchanged at $200-205 and $205-210 per m3 , although kapur is reported to be slightly oversupplied. Prices are holding high due to aggressive purchases by India.

Supply of structural plywood tightens
Imported tropical 12mm panels are in tight supply due to limited arrivals. There are practically no supply offers on concrete forming panels because of log shortages in the production regions. For instance, log inventories at Samarinda (East Kalimantan), Indonesia, are reported to be only one-fourth or less of the normal monthly levels. Supply of imported tropical plywood is expected to remain tight for the foreseeable future. Prices of imported JAS concrete forming 3x6’ panels are inching up to ￥920-930 per sheet delivered. Prices
for Southeast Asian hardwood 12mm structural panel F 4star (prime category) are at ￥950-970 per sheet delivered, up ￥20.

New forecast of 2006 housing starts
According to a Japan Forest Products Journal's survey, the country’s ten major house builders forecast new housing starts at 1.19 million units in 2006. This is lower than the 1.198 million units forecast by the Research Institute of Construction and Economy last October. Although market sentiment has improved with the general recovery of the country’s economy, house builders think that factors, such as rising mortgage loan interest, lower
property prices and discontinuation of tax break measures, will have a negative impact.

Higher consumption tax is currently under discussion and will likely be the main issue in the Diet. This may trigger rush in construction orders before a higher tax is applied but most of the builders do not expect a sudden rise in housing demand this year. 

December and January Wholesale Prices

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  Plywood grades. Letter(s) on the left indicate face veneer(s), those on the right backing veneer(s). Veneer grade decreases in order B, BB, C, CC, etc.	MBF           1000 Board Feet
Plywood	MDF           Medium Density Fibreboard
BF         Board Foot	F.CFA         CFA Franc
Sq.Ft     Square Foot	PHND             Pin hole no defect grade
Hoppus ton     1.8 cubic metres	Price has moved up or down

Source: ITTO'  Tropical Timber Market Report