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Japan Wood Products Prices

01-15th November 2006

Japan Wood Products Prices

Dollar Exchange Rates of  15th November 2006

Japan Yen 118.10

Reports From Japan

Housing starts chalk up strong gains
Total housing starts surged to 112,442 units in September, up 4% from a year ago and the second highest monthly level in the year (see chart). The growth was supported by gains in rental and built-for-sale houses. Wood-based units accounted for 44% of the total housing starts, down from 45% the previous month. However, wood structured houses increased for the twelveth consecutive month compared with one year earlier. Seasonally adjusted annual starts reached 1.298 million units, the fifth consecutive month over the 1.2 million level. In Jan-Sep 2006, total housing starts were 4.5% above the pace in 2005.

China lifts prices for plywood and LVL
Export prices for Chinese poplar plywood and laminated veneer lumber (LVL) for the Japanese crating market jumped $30-50 per m3 in October, forcing importers to raise sales prices by ¥100 per ply sheet and ¥4,000-5,000 per m3 of LVL. Chinese exporters raised prices to offset a 2% cut of refund on export duties (see TTM 11:18), and in response to the weak US dollar against the yuan and stronger demand from USA and the Middle East. Chinese products were increasingly being used as a substitute for Southeast Asian hardwood products in short supply. These products were being traded in Japan at ¥950-980 per sheet FOB truck of poplar plywood and ¥46,000-48,000 per m3 of LVL.

August log imports surge snaps declining import trend
Import of tropical logs by Japan surged 3% to 134,489 m3 in August. However, total Japanese imports of tropical logs amounted to 855,866 m3 in the year to July, 12% below last year’s import volume (see chart). Japan’s total supply of Southeast logs fell 12% to 846,117 m3 up to
August. Accumulated log imports in 2006 had come from Malaysia (77%, two-thirds of which from Sarawak), PNG (15%), Solomon Isl. (7.5%) and Africa (0.5%).

Tropical log prices reach fresh 12-year highs
Log prices in Japan had climbed steadily over the last year, reaching fresh 12-year highs every month due to imbalanced supply and demand. Sarawak, which supplied around 58% of the tropical logs to Japan, had been raising log prices virtually for each shipment bound for Japan.
However, the available volume was lower compared with last year’s shipments, thereby exerting added pressure on prices. The situation was likely to persist through late March or early April as the monsoon season further affected log harvesting operations. This would in turn have an impact on Japanese plywood mills hoping to build up log inventories.


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

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