| Report From Japan
Japan's New Demand Projections
Japan's Forestry Agency has come out with revised demand projections for 2002.
Total demand is now forecast at 90,010,000 cubic metres, 1.1% lower than 2001. For the
last five years the figure has been less than 100 million cubic metres. This year's figure
shows a sharp drop compared to the recent peak figure of 99 million cubic metres recorded
in 2000.
Of the overall demand a 3.4% decline is foreseen in lumber demand to 35,690,000 cubic
metres, the largest foreseen drop. Also the demand for pulp and wood chip, which has been
rather steady recently, is expected to be down by 6.5% because of slower demand for paper
and the increasing share of recycled waste paper in total consumption. The demand for
other products is thought to remain steady but demand for laminated products could be up
by 3.6% due to growing demand for laminated products because the new housing regulations
which promote the use of kiln dried.
Plywood Import Down
Total imports of plywood in February were 349,000 cubic metres, 12% lower than the same
month a year ago. Beginning February 2000 monthly imports have dipped below 350,000 cubic
metres. With these low arrivals stock levels are really down and the market could bounce
back up.
For February imports by source were: 173,000 cubic metres from Indonesia, 25.5% less
than January, which is the lowest monthly arrival in last two years. 140,000 cubic metres
from Malaysia, 8.1% less. 14,000 cubic metres from China, 2% up and 8,700 cubic metres
from Canada, 4.3% up on January.
The current market price for imported JAS concrete formboard plywood is about \770 per
sheet delivered wholesalers, with some offers of \10-20 lower. The future market
indication in Japan remains weak while export prices in Indonesia are firming at about
US$255-260 per cubic metre C&F with some proposals from shippers of higher prices.
Demand for Small Tropical Logs
Price negotiations in the domestic market between the importers and the plywood mills
are reported as hard going because log costs are getting higher because of higher FOB
prices and the weaker yen while plywood mills are in trouble with depressed plywood sales
prices. Mills say that the gap between the price they can afford to pay and importer's
asking prices is too high. Log stocks remain low in the plywood mill yards with purchases
being hand to mouth only. To reduce the average log cost mills are increase the proportion
of lower cost small or super small logs (especially Meranti). It is reported that some
mills have decided to delay new purchases until the rain season is over and log production
recovers in Asia.
Market prices in early April for Sarawak Meranti regular were about yen 5,300 per koku
CIF, yen 50-100 higher than a month ago. The actual cost for the importers is about yen
5,600-5,700 while for the plywood mills the acceptable price is about yen \5,000 so there
is about yen 300-400 gap between importer's cost and sales prices. Meranti small prices
are about yen 4,600 and super small are yen 4,300-4,400, yen 300 higher and firming. There
are some inquires for PNG's plantation kamerere while prices for Taun and Calophyllum are
holding at about yen 4,700-4,800. China was the dominant log buyer in PNG last year and
for this year too Chinese buyers seem ready to set the trends.
Domestic Prices at Record Lows
The Japanese domestic log and lumber market is showing signs of serious confusion
because of depressed demand with prices for both logs and lumber plunging to historical
low levels.
Log prices continue to record the lowest levels ever for three straight months. Cedar
log prices are way down to yen 9,000 per cubic metre, which, it is said, does not even
cover harvesting cost. Cypress log prices are also down to record lows of yen 18,000 per
cubic metre. The reason for the extremely low prices is the slowness in demand for
structural lumber and the high log production in the first quarter. This increase was in
anticipation of a recovery in demand at the onset of spring. Sawmills, with few orders for
lumber, are only buying small volumes. Analysts fear that, at these prices, log production
after May will slow down considerably |
