Japan Wood Products Prices
1-15 Feb.  2004

【March 2004】

Japan Wood Products Prices

Dollar Exchange Rates of 8th March 2004

Japan Yen 112. 07

Report From Japan

Russian log and lumber imports up in 2003  

Imports of Russian logs and lumbers in 2003 exceeded that 2002. In particular, lumber imports from Russia in 2003 were the highest in the history of this trade. Total log imports were 4,837,000 cubic metres, about 300,000 cubic metres more than 2002 and this increase was driven by active demand from plywood mills. In 2003 larch accounted for 46% of total log imports of 4,977,000 cubic metres, The Japan Lumber Report is saying that log inventories at the end of 2003 dropped to 521,000 cubic metre, which was less than a half of the inventory seen four years ago. 

The supply of larch increased by 10% due to the progressive shift away from tropical hardwood logs to softwood logs by major plywood mills.  

Red pine bacomes the major lumber material for the house builders and the unexpected fall off in supply of red pine logs during July to October held total imports to only 1,388,000 cubic metres. Red pine log import for the four months period July-October was only 64,000 cubic metres so mills were not able to build up inventories and this resulted in higher prices.

Lumber imports from Russia is increasing every year and last year about 43% of the lumber came from joint venture companies.

January housing starts  

Total housing starts in January have been reported as 87,970 units, 7.3% more than the same month a year ago and this was the second months where an increase was reported.

 Higher Plywood Prices  

Quotations from Indonesia for plywood for Japan have increased again. In its latest offer Apkindo was reported as quoting US$390-400 per cubic metre C&F for 12 mm JAS concrete formboard panels, some US$20 higher than the previous proposals made in January.

 Prices for 12mm structural panel F 4star premium category are US$400-410, US$10 higher than the previous quote. The previous offer price translated to a cost of about yen 915 per sheet delivered Tokyo wholesalers.  The cost with the new quote would be about yen 945 up yen 30 yen per sheet.  

Currently domestic market prices are yen 850-870 yen. US$480-490 is the new proposal on floor base panel F 3star US$60 higher than the previous offer. Building materials manufacturers have been buying actively and prices have gone up to around US$450.

 Tropical Log Prices Rising  

Because of firming FOB prices, increases in ocean freight and the weakening yen, the log market in Japan is finally firming. In early March, Meranti regular prices were about yen 5,300 per koku CIF, 100 yen higher than in late January. Kapur regular prices are reported as yen 6,500, also 100 yen higher.

 For past two to three months, prices have been steady at the bottom of the range but now it seems as if, finally, prices have started to move, the first sign of a rise in 16 months.

 Because of the increases in prices plywood mills have signalled their intention to raise  prices for plywood so as to offset the higher log costs. However it is not only the FOB prices that are moving, freight costs are up and the yen is buying fewer dollars these days.  The fear in the trade in Japan is that these price increases will simply speed the shift from tropical logs to other materials.

 Meranti small prices are reported at yen 4,400- 4,500 and super small are at yen 4,050-4,100, yen 50-100 higher than in late January.

 Freight costs have been rising since mid February and the current rate for Sarawak loading (one port loading and two ports discharging with full load) is US$30-31 per cubic metre and for PNG loading is US$38-40, this is about US$3 higher than the January freight levels.

 Despite improvements in the weather in Sarawak, port log inventories are reportedly still tight such that exporters are asking higher FOB prices. Japanese buyers have apparently already accepted US$148 per cubic metre FOB for Meranti regular so the suppliers are now pushing for at least US$150 for Meranti regular, US$125 for small Meranti and for US$112 for super small Meranti.  For Kapur floaters the prices are at around US$185 and at US$175 for kapur sinkers but the Japanese buyers are offering strong resistance at these levels.

 Logs For Plywood Manufacturing      

For more information on the Japanese market please

see www.n-mokuzai.com