Concerns about future supply and anticipation of higher prices arising from the Middle East conflicts have prompted some Japanese buyers to secure physical stocks in imported tropical hardwood plywood.

This trend is similar to some speculative buying of Japanese softwood structural plywood due to the geopolitical tensions in the Middle East.

“The effective closure of the Strait of Hormuz has raised concerns about adhesive raw material supplies, and some manufacturers are already facing procurement limits for April (2026).

This uncertainty has led certain buyers to place larger-than-usual orders, even as plywood mills maintain cautious stance because their inventories are not abundant and raw-material outlook remain unclear,” according to the Japanese Lumber Reports (JLR).

Due to sluggish housing starts, domestic demand for Japanese softwood structural plywood remains weak currently.

“Some market participants have already begun moving in anticipation of further price increases while others are voicing concern about the outlook for supply and the possibility of additional disruptions as the situation continues to evolve and remains difficult to foresee with any confidence, especially given the broader geopolitical uncertainty surrounding the Middle East,” added JLR, its bimonthly report of which is reproduced in International Tropical Timber Organisation (ITTO) Tropical Timber Market Report.

The report said although by late March, adhesive manufacturers had yet to make formal moves to request price increases from plywood, laminated lumber or other engineered wood products, industry observers note that raw-material suppliers are announcing price hikes at different times and with varying timing, making it difficult for adhesive manufacturers to determine the eventual scale of cost increases.

According to JLR, plywood mills had already begun calling for higher prices for structural plywood in February before the effective closure of the Strait of Hormuz, yet sluggish demand in March had slowed their efforts.

It added: “The possibility of adhesive price increases, combined with rising transportation costs, is adding strain to the market and complicating attempts to improve profitability for many producers who were already facing challenging conditions and limited room to manoeuvre in their pricing strategies, especially as cost pressures accumulate and uncertainty persists.

JLR said manufacturers of petrochemical-based building materials have been announcing significant price increases one after another, with some increments by 40 per cent, and indicating that further increases may be unavoidable if procurement conditions worsen.

Logistic costs are also rising. With crude oil prices surging, several global major container vessels have introduced emergency fuel surcharges ranging from US$50 to US$200 per container.

These surcharges apply to all long-haul routes and are expected to raise transportation costs for imported materials, particularly European products that require long-distance shipping.City & Local Guides

On Japan’s imported tropical hardwood plywood, JLR said the export prices from suppliers remain firm.

Indonesian ordinary plywood is offered at US$970 per cubic metre (cu m) for 2.4mm panels, US$880 per cu m for 3.7mm and US$850 per cu m for 5.2mm.

Prices for 12mm coated formwork, formwork, and structural plywood remain unchanged.

“Indonesian (plywood) manufacturers appear inclined to delay contract negotiations in hopes of passing rising adhesive and freight costs to buyers),” it added, Indonesia and Malaysia are the largest suppliers of tropical hardwood plywood to Japan.
  
Source: ITTO