Japan Wood Products Prices
1-15th November  2004

Japan Wood Products Prices

Dollar Exchange Rates of  5th Nov.  2004

Japan Yen 105.6

Severe earthquake hits Niigata  

On October 23rd, an earthquake, magnitude 6.3, hit central Niigata about 200 kilometres from Tokyo, some 40 people were killed and more than 3,000 were injured. After-shocks caused further damage because of landslides and flooding.  

Many houses were totally or partially destroyed and the road network was also heavily damaged around Ojiya city, the epi-center of the quake. Aftershocks with a magnitude of five plus continue almost daily and restoration work is tough going. According to initial reports from the Niigata prefectural government, 156 houses were totally destroyed, 250 were partially destroyed and 2,200 units were damaged. 

The Japan Lumber Report is saying that most of the damaged houses are old houses and the evidence is that recently built wooden houses withstood the quake well except for broken windows and wall cracks. Some houses of more than fifty years old stood up well and much of the damage to houses was from landslides. 

The Japanese Housing Bureau of the Ministry of Land, Infrastructure and Transport has requested builders and suppliers of building materials to up production and delivery to allow rapid restoration work particularly as winter is approaching and this area suffers heavy snow fall every year. 

September housing starts  

September housing starts were 108,281, 10.1% higher than the same month a year ago and this represents four consecutive months of more than 100,000 units starts.  

The Research Institute for Construction and Economy has revised forecasts for new housing starts in 2004 to 1,165,000 units, slightly down from 2003. The forecast for 2005 is 1,152,000 units, 1.1% less than 2004. The institute says there are no clear signs of an increase in housing starts, despite the recovery of personal spending in Japan.  

Meranti log prices down locally 

The market for meranti logs is reported as tightening because the monsoon rain in SE Asia has slowed harvesting while, at the same time demand from Japanese plywood mills remains steady. As the Yen exchange rate has moved to 106 yen to the dollar and this has caused prices to fall slightly in the domestic market. Importers were pressured to agree to some price cuts by determined buyers for the local plywood mills. 

The cost of meranti regular logs was US$150-152 per cubic metre FOB, which is about Yen 6,100-6,200 per koku CIF but the importers sold at Yen 6,050-6,100 so they are Yen 50-100 yen per koku in deficit. 

Kapur prices also fell from previous high Yen 6,400-6,500 but the loss to importers was not as much for meranti regular. Small meranti prices are about Yen 5,400-5,450 some Yen 50-100 lower than late September prices.  

FOB prices have been firming since the middle of October. Sarawak log inventories are reported as particularly tight. Meranti regular prices bottomed at FOB US$150-151. Yellow meranti is reported in short supply. Small meranti FOB prices are US$125-126. Kapur floater prices are at US$161-163. 

Compared to late September prices, FOB prices are about US$1 or US$2 lower but a rebound is likely especially for small and super small logs, which are said to be in tight supply.  

Keruing log prices are at a plateau at US$195 but on account of tight supply situation some importers think that US$200 per cubic metre is coming.  

Samling group opens office in Japan 

Samling, the Malaysian group has opened an office in Japan to be headed by Mr. T. Itoh, former managing director of Nissho-Iwai. Samling Japan will be the responsible for marketing the various wood products of the Samling group which include plywood, MDF, doors and interior furnishing materials. This local office, says the company, will make possible closer ties between the producers and customers in Japan.  

Strong Euro weakens export power 

On November 8, the Euro recorded its highest US dollar exchange rate at 1.298, exceeding the past record of 1.293 seen in February. The Euro had been weak against the dollar for almost three years since it was launched in 1999 but a rapid appreciation of Euro since last year has put timber exporters in Europe in a tough spot. The lowest rate of Euro was 0.853 to the dollar in October 2000 so the Euro appreciation by 52% to the dollar is taking its toll. The Euro is also up against the Yen at 136 which is the highest ever and this is casting a shadow over the timber export opportunities from Europe. 

For more information on the Japanese market please

see www.n-mokuzai.com

Abbreviations

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  Grade B faced and Grade C backed	MBF           1000 Board Feet
Plywood	MDF           Medium Density Fibreboard
BF         Board Foot	F.CFA         CFA Franc
Sq.Ft     Square Foot	Price has moved up or down

Source:ITTO