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Japan: Demand for Small Tropical Logs

2002.04.22


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.


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