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Japan Wood Products Prices

16-30th June 2007

Japan Wood Products Prices
Dollar Exchange Rates of  15th
May  2007
Japan Yen 123.12

Reports From Japan

 Japan plywood situation remains unchanged
Prices of plywood have not changed since the rainy season started in Japan. Stocks of plywood are still larger than expected and cargo movements have been stagnant. However, thick items of softwood plywood had maintained their price levels. Distribution wholesalers are hoping business will change for the better due to April’s improved housing starts, and that prices will recover once some plywood stock have been moved out. Big contracts for plywood have not been established, mainly because of high prices in Malaysia and Indonesia.

Manufacturers, trading companies and distributors met to discuss the sluggish plywood market. They said that although thick items had been selling well and demand had been met for precut orders of softwood plywood, there could be a shortage of Lauan lumber in the future. Buyers had been making infrequent purchases and, combined with oversupply of lumber, the market had been weak. Some observed rising prices for thick products as a result of the construction industry’s reduction of the amount of flooring used in order to cut costs.

Government expands focus on biomass fuel
The government of Japan has set near and long-term targets to increase production of domestic biomass fuel. By 2030, the government hopes that technology can be used to produce bioethanol from materials including lumber and rice straw. The Ministry of Agriculture, Forestry and Fisheries estimated that up to 1,300,000 kiloliters could be produced from wood based raw
materials and would contribute to forestry management and conservation. The initiative, in addition to preventing global warming, would help revitalize regions and promote employment.

Housing industry seeks ways to ease lumber supply
At a seminar on the Imported House Industries Organization, Kitaoji Yasunobu of Polus-Tec Inc. noted that the company’s profits dropped to half due to the higher cost of wages, wood and land. He said that to ease the pressure, a new product could help avert “wood shock”. Fast growing varieties of trees currently being grown in the South East Asia area might help ease thepressure on wood supply in the future. Additionally, technological innovations would improve manufacturing processes to ensure the future supply of lumber products.

Japan imported more plywood in April
Japan’s imports of plywood increased 4.4% from a year earlier. The statistics, based on information from the Japan Plywood Manufacturers’ Association, revealed that Malaysia and Indonesia had exported more to Japan than in March, up 0.5% and 0.7% respectively. China’s exports to Japan also grew 25.4% in April. Domestically, Japan continued to generate more outputs of pure softwood plywood although the quantity of its shipments decreased. Overall, Japan’s imports plus domestic production showed an upward trend of 2.6%, and the percentage of imported plywood products from March to April grew 58.4%.

Japan calls for compliance with JAS
The Japanese Ministry of Agriculture, Forestry and Fisheries investigated a number of overseas manufacturers of structural laminated lumber to check their compliance with Japan Agricultural Standards (JAS). The investigations revealed that the structural strength of several manufacturers’ products was near the lower limits of JAS. Although the Ministry found no plant in violation of JAS, many manufacturers’ products were one rank lower grade in strength. The Ministry advised that the quality of the standards should be improved to comply with revised JAS (as of 1 March 2006), and said it would undertake periodic checks on overseas manufacturers in
the future.

Weather and high prices drag down demand for South Sea logs
The Supply of South Sea logs and Japanese demand for logs continued to be weak. Japanese plywood mills and Chinese buyers were reducing their purchase of South Sea logs, and supply was low due to poor weather conditions in the region.

Japan reduced its purchase of small meranti logs, although these logs were being purchased at the local level, so prices had not dropped drastically. There had been some inquiries for plantation logs by Japanese plywood mills. Malaysian prices for logs had been too high for Japanese buyers.

Imported plywood faces market slowdown
Although arrivals of imported plywood were low, the market for imported plywood has continued to fall since late May. This is mainly due to the weak demand after prices for plywood steeply increased last year. To reduce currently high levels of inventories, wholesalers are cutting prices.

Tokyo Wholesale Market remains sluggish 
Wholesalers are concerned that a liquidation of stock in the form of a “slaughter sale” may occur due to business inactivity. At a meeting on 6 June, wholesalers expressed concern about the lack of movement in the market. Reasons for the fears were delays in the issuance of construction certifications, lack of shipments of stock, and “cash strapped” companies. Nevertheless, they had hope that shipments would commence soon and the market would recover.

Specifically, for imported timber, prices for Malaysian logs were bullish and imports of perupok and agathis laminated lumber remained small.


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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