Japan Wood Products Prices
16-30th November 2004

Dollar Exchange Rates of  5th Nov.  2004

Japan Yen 105.6

Report From Japan

Building materials firms profit 

The results after six trading of six major Japanese building materials companies have beaten expectations with total sales close to Yen 500 billion. 

The Japan Lumber report says the reason for the good performance is the improved demand for building materials for housing. Also, plywood prices have been rising steadily since August and this contributed to the good results.  

However, there is a slump in the market for large construction projects such as office buildings and sales are weak in this segment.  

Housing activity in the first quarter 2005 is expected to slow due to seasonal factors but movement of building materials is expected to be firm for some time. This is due to ongoing repair and restoration works after the damage caused by the typhoons and earth quakes in various parts of Japan the second half of 2004.

Sumitomo starts housing business in China  

Sumitomo Forestry announced that it plans to develop a housing business in China. The company plans to build and market houses and to enter into the building materials distribution business. 

Sumitomo will apparently acquire a 30% share in PWP- Paragon Wood Products (Dalien) and PWP (Shanghai). These companies are wholly owned subsidiaries of Zee America Inc., which makes and markets trusses and builds houses in U.S. market. 

Chinese houses are traditionally built with brick or concrete but the government is receptive to the introduction of new building systems and regulations have been modified to encourage more construction with wood. This move to China comes at a time when Sumitomo Forestry plans to withdraw from the wooden unit housing business in Japan and to dissolve its subsidiary company 'Sumitomo Ringyo System Housing' as of the end of March 2005. 

September Plywood supply 

Total plywood supply in September was 660,000 cubic metres, 7.5% less than August but a little more than in September last year. This is the first decline below 700,000 cubic metres in three months and is the result of a fall in plywood imports which dropped to less than 400,000 cubic metres.  

September plywood imports were 386,000 cubic metres, 16.9% less than August, but 4.2% more than the same month a year ago. This is the first drop below 400,000 cubic metres in six months. 

Some 166,000 cubic metres of imports were from Indonesia, 27% less than in August and the lowest supply this year. Around 178,000 cubic metres was from Malaysia, (down 6.5%). A modest 26,000 cubic metres was from China, 7.4% less. Domestic production was 273,000 cubic metres, out of which 185,000 cubic metres was softwood plywood, 13% more than in August.

Imported plywood market 

As the yen has been appreciating steadily the cost of imports has been dropping in yen terms. However, with old inventories bought at a time when the Yen was weaker, traders are facing difficult times. Those carrying older stocks do not welcome the strong yen as the buyers are demanding reduce prices. 

Export prices of tropical hardwood commodity panels such as 12 mm concrete formboard panels are bottoming out and rebounding some say. Tropical hardwood plywood prices are strengthening and prices. Analysts say that the reason for the change is that plywood production in Indonesia and Malaysia dropped due to the Islamic holidays and because heavier purchases were made before the holidays in SE. Asia. 

Current C&F prices for JAS concrete 3x6 formboard panels are US$355-360 per cubic metre and traders say it is getting difficult to buy at this price. The price for structural F 4star (prime category) is US$365-370,US$5-10 higher than last month. The equivalent for standard F 3star panels (second category/second grade) is US$350 and firming while the market prices in Japan are about 880 yen per sheet delivered and some cases lower offers have been seen with weak future indications on price movements. 

November Wholesale Prices

 For more information on the Japanese market please

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