Japan Wood Products Prices
1-15th May  2004

Japan Wood Products Prices

Dollar Exchange Rates of  7th May  2004

Japan Yen 112.2 

Report From Japan

The gap widens  

The slow pace of increase in the Japanese market prices for logs is failing to keep pace with the rapidly climbing FOB prices for tropical logs. FOB log prices have been advancing the beginning of the year and this, along with the rising ocean freight costs ( up US$3 per cubic metre since March) has pushed up the cost of import logs.  

Price negotiations between the importers and plywood mills have been stalled for a month. Since late April, price negotiations started concerning earlier shipments which were about US$150-154 per cubic metre FOB for Meranti Regular logs but these negotiations got no where during April and continued into May.

Log importers have even tried to compromise by offering logs at cost (without profit) but plywood mills that even still the increase is too high. Even at an "at cost" basis, an increase of Yen 700 per would be required to match the at cost CIF price, this translates to a 13% increase in price compared to the levels in April. Plymills say that they cannot accept this and there has been no agreement so far.

Plywood mills want to see plywood prices moving up before they accept higher log prices but, with rather limited log inventories the mills need to buy some logs to maintain production. At the moment the importers have taken a firm stand on the need for a price increase. The net result is that while there is no agreement there are less purchases but still FOB prices are climbing because of active purchases by local mills and by buyers from other countries. If this issue remains unresolved then forward orders will be delayed which could result in a shorta of log stock sometime in the near future.

The current exporters offer price for Meranti Regular logs is US$165 per cubic metre FOB for SQ and up. The importers are reportedly saying that this is an impossible level when they are unable to even pass on the cost at a level of US$150 per cubic metre.

April Wholesale Panel Prices

Printed plywood prices up  

Added value plywood processors decided to increase prices of printed plywood and coloured plywood by between 5-10% as of May. The main reason for the increase is the steep increase in the cost of the baseboard and resin. Tropical plywood prices have been climbing due to a shortage of logs due to restriction on timber harvests in producing countries, the declining availability of good quality logs and the sharp rise in ocean freight rates

 These factors have combined to reduce import volumes so inventories are dropping which, again, pushes up prices. In addition the local added value processors have been having a tough time coping with revised Building Standards Act, particularly on formaldehyde emission.

 For more information on the Japanese market please

see www.n-mokuzai.com

Source:ITTO