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Japan revises down projections of timber demand

Revised demand projections

Japan's Forestry Agency has revised its projections for total wood supply and demand made in March 2002.

The revised figure for total demand is 85,631 cubic metres, which is the lowest since 1967. This is the first time that demand has fallen below 90 million in 35 years. The initial estimate made in March was 90,011,000 cubic metres, 2.9% less than 2000 but the revised figure is 13,600,000 cubic metres less than 2000. The largest drop is the demand for lumber to 34,081,000 cubic metres, which is 7.8% less than 2001. The reason is the sluggish starts for housing.

Panels in the First Half of 2002

The total supply of woodbased panels (domestic and imports) for the first half of 2002 came to 5,063,000 cubic metres, which was a 11.4% reduction compared to the same period last year. The fall in supply was 654,000 cubic metres and was about evenly split between domestic production and imports. However for plywood the fall in domestic supply was only 10%, smaller than for the fibreboard and particleboard.

Imports of plywood fell by 10% reduction while the domestic supply was down by nearly 14%. Some domestic mills closed and others continued to reduce production. As the result the lower supply plywood prices improved in May, but then as production picked up the market became very fragile again. On the positive side the plywood market share in the first half was 71.8%, a marginal 0.3 point recovery over last year.

The supply of MDF dropped 100,000 cubic metres and particleboard supply dropped 65,000 cubic metres. For these panels the share of domestic supply continues to shrink. The total volume of domestic supply of all products came to 2,321,000 cubic metres, and the share was 45.8%, down 0.3%. The domestic share has continued to shrink each year since 1998, and such trend is predicted to go on in future.

Tropical Log and Lumber Prices

Logs For Plywood Manufacturing
CIF Price Yen per Koku
Meranti (Hill, Sarawak)
Medium Mixed 6,300
Meranti (Hill, Sarawak)
STD Mixed 6,400
Meranti (Hill, Sarawak)
Small Lot
(SM60%, SSM40%) 5,600
Taun, Calophyllum (PNG)
and others 5,400
Mix Light Hardwood
(PNG G3-G5 grade) 4,700
Okoume (Gabon) 6,800
Keruing (Sarawak)
Medium MQ & up 7,000
Kapur (Sarawak) Medium
MQ & up 6,600

Logs For Sawmilling FOB Price

Yen per Koku
Melapi (Sarawak)
Select 8,800
Agathis (Sarawak)
Select 8,600

Lumber FOB PriceYen per Cu.m
White Seraya (Sabah)
24x150mm, 4m 1st grade 113,000
Mixed Seraya 24x48mm,
1.8 - 4m, S2S 42,000

World Value of the US Dollar 25th October 2002

Japan Yen 124.26

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