| Tropical Log Imports Down Japan's log imports from
tropical countries during April were 128,800 cubic metres, the second lowest level after
March this year when imports fell to 108,000 cubic metres. Normally an abnormally low
month imports in the next have tended to rebound strongly so low arrivals for two straight
months may mean that the market is still contracting.
Demand in Japan for tropical logs has been declining and the situation has been
aggravated by rising FOB prices despite the depressed plywood market in Japan. This has
created a rather large gap between importers cost and plywood mill offers.
Total log arrivals for the first four months this year are 517,000 cubic metres, 35.9%
less than the same period of last year. The average monthly arrivals for this year is only
129,200 cubic metres, the lowest monthly average for many years.
Log Prices Moving
FOB prices in the producing countries are rising rapidly and market prices in Japan are
being forced up. In early June, Sarawak Meranti Regular was at around Yen 5,600 per Koku
CIF about yen 200 above prices a month.
The trade is reporting that log FOB prices are shooting up and report that for logs due
to arrive in late June prices on the local market will be up above the best on selling
prices by about yen 5-600 per koku. Importers are desperate to pass on the price increases
but the end-users are resisting strongly.
These days the mills carry very little inventory and are buying hand to mouth and
resist buying until the last minute. In the face of higher log costs the mills are pushing
plywood prices higher with little success. Many fear that, as tropical log prices are
forced up, mills may be forced to switch to lower cost logs.
Hardwood Plywood Trends
Of the imported hardwood plywood products, the supply of sheathing is said to be tight,
particularly for CP2 and 9 mm. In the Tokyo area, 11.5 mm long is also in short supply
because imports have been held down since early this year. Prices for imported sheathing
CP2 are up by yen 40 at yen 720 per sheet delivered, which is higher than long panel
prices. Prices for long panels are up by yen 30 at yen 700. JAS concrete formboard prices
are about yen 800, yen 20-30 higher than a month ago.
Importers are not accepting any low offers now as they anticipate future import costs
will be higher. Price hikes by the suppliers have been coming in quick succession and the
price push being attempted by importers in Japan cannot keep up.
Indonesian proposal for 2.4 mm is US$15 higher than a month ago with US$400-410 per
cubic metre C&F and for 3.6 mm prices are US$25 up at US$340-360 per cubic metre
C&F.
FOB Price Push for Plywood
FOB prices for tropical hardwood plywood continues to rise due to reported log
shortages in Indonesia and Malaysia.
Indonesian JAS concrete formboard 12 mm plywood which was available at a C&F price
of US$310 per cubic metre has been all been sold out and new price offers from producers
are now as high as US$320-330. Under this strong pressure the market in Japan is having to
respond and this accounts for the rapidly firming market. Domestic inventories of JAS
concrete forming and sheathing are reportedly getting low.
Domestic plywood makers are also proposing higher prices because
tropical hardwood log prices are climbing. Also, prices for softwood logs such as Russian
larch and New Zealand radiata pine are also on the upswing. Demand in Japan is not really
active but orders for imported plywood are temporarily feverish because of short
inventories and the prospects for higher prices of future arrivals. Standard prices of
imported JAS concrete formboard are about yen 820 per sheet delivered in Tokyo area but
there are some dealings at yen 850 per sheet. Long sheathing prices are yen 720 with new
offers yen 770.
Domestic concrete formboard prices are about yen 800, yen 20 higher than a month ago
and getting stronger. Coated 3x6 concrete formboard prices are up by yen 20-30 at yen
980-1,000 with very little imported product being in the market. Prices for the same
product from domestic suppliers are around yen 970-980, yen 10-20 higher than last month.
The domestic structural softwood plywood market is said to be improving after major
mills reduced production further. The trade press is reporting that there are no more low
priced items on the market. |
