Japan
Wood Products Prices
Dollar Exchange Rates of 10th
Nov
2024
Japan Yen 154.63
Reports From Japan
Rising raw material costs
driving inflation
Wholesale inflation accelerated in October as renewed yen
weakness drove up import costs. Bank of Japan data
showed the corporate goods price index (CGPI), which
measures the price that companies charge each other for
goods and services, rose 3.4% in October from a year
earlier, above market forecasts for a 3.0% rise.
An increase in the price of rice, coupled with the
increasing cost of nonferrous metals, food and oil, pushed
up overall wholesale inflation, a sign companies remained
under pressure from rising raw material costs.
The Bank of Japan has signaled readiness to raise interest
rates further if inflation becomes driven more by robust
domestic demand and higher wages, rather than rising raw
material costs.
See: https://www.msn.com/en-ph/news/money/japan-s-
wholesale-inflation-jumps-in-oct/ar-AA1u1sQG
Retail sales up only 0.5% from a year ago
Factory output rose slightly in September as the economy
continued its modest recovery. The Ministry of Economy,
Trade and Industry reported that industrial production
gained 1.4% from August, led by cars and chemical
product-makers.
That beat estimates for a 0.8% increase, but output was
still down 2.8% from a year ago.
For the third quarter 2024 production slipped 0.4% from
the previous period. The ministry also reported retail sales
fell 2.3% in September from August, leaving them up only
0.5% from a year ago.
Manufacturing was held back by stagnation in
employment levels, a renewed fall in purchasing activity.
Manufacturers report input costs continue to rise but at a
slower rate than recently. Despite this, manufacturers have
raised their selling prices to the greatest extent in three
months.
See:
https://www.japantimes.co.jp/business/2024/10/31/economy/japa
n-factory-output-sept/
and
https://www.pmi.spglobal.com/Public/Home/PressRelease/a02e5
829aad74c0296ea350e883007c2
Households cut spending again as prices rise
According to a report from the Ministry of Internal Affairs
and Communications households in Japan cut spending for
a second month as rising prices continue to deter
consumption.
Spending by households dropped 1.1% from a year earlier
in September after dropping almost 2% in the previous
month. An increase in spending has only been recorded
twice in the past 12 months and this trend is a signal to the
Bank of Japan to take a cautious approach to interest rate
hikes.
Dollar strength drove the yen to a three-month
low
The Republican Party’s victory in the US presidential
election resulted in a strengthening of the US dollar as
expectations of tax cuts and tariffs on imports drove
optimism about economic growth, at the same time raising
concerns on inflation rates. The dollar strength drove the
yen to a three-month low of 155.
The weak yen boosts exports and in a bonus for tourism
but it forces up the cost of fuel and food import costs.
See: https://www.reuters.com/markets/asia/trump-victory-
heightens-risks-boj-yen-renews-slide-2024-11-07/
Residential property price index up from a year
earlier
The latest Global Property Guide (GPG) ‘Japan
Residential Real Estate Market Analysis 2024’, quoting
Land Institute of Japan data, says residential property
prices in Japan continue to increase modestly despite
slowing demand, weakening construction activity as well
as the disappointing economic performance.
In the first quarter of 2024, the nationwide residential
property price index rose by 2.65% from a year earlier,
following year-on-year increases of 1.96% in the final
quarter of 2023 2.54% in the third quarter, 4.78% in the
second and 4.12% in the first. However, adjusted for
inflation, prices were more or less steady over the same
period.
The GPG report says residential construction activity is
falling. In the first five months of 2024 the total number of
housing starts in Japan dropped 3.8% to 323,445 units as
compared to a year earlier following a decline of 4.5% in
the full year of 2023 and increases of 0.5% in 2022 and
5% in 2021, according to the Ministry of Land
Infrastructure and Tourism.
In six major cities residential land prices rose by almost
1% in the year to September from a year earlier. For
the rest of the country residential land prices were up 0.7%
for the year
See: https://www.globalpropertyguide.com/asia/japan/price-
history
Furniture retailer success in Southeast Asia
One of Japan’s largest furniture retailers has been doing
well with sales at its outlets in the Philippines and this is
encouraging the company to widen investment in retail
stores in other markets. The furniture chain, which has
outlets around Japan, started its first store in the
Philippines earlier this year as it drives for growth beyond
its domestic business were retail growth has slowed.
See: https://asia.nikkei.com/Business/Retail/Japan-s-Nitori-says-
racking-up-bigger-than-expected-Philippine-sales
September 2024 wooden office furniture imports (HS
940330)
Year on year, the value of Japan’s imports of wooden
office furniture in September was down 10% and
compared to a month earlier the value of imports dropped
around 14% in September.
China accounted for most of wooden office furniture
imports to Japan in September at around 69% of the total
value of imports of HS940330. The other main shipments
in September were Malaysia and Taiwan P.o.C. In August
the value of shipments from Italy were second after China
but in September the value of shipments was sharply
down.
Arrivals of wooden office furniture from Malaysia
increased in September rising 80% compared to the value
of August shipments.
September 2024 kitchen furniture imports (HS
940340)
The value of arrivals of wooden kitchen furniture
(HS940340) in September declined month on month but
the pace of decline seen in previous months slowed in
September. Year on year, the value of imports of wooden
kitchen furniture items (HS940340) in September were
marginally down on the level seen in August.
The top shipper in September was the Philippines and the
share of the Philippines in the total value of arrivals rose to
53% from the 44% in August reflecting the 23% month on
month surge in shipments. Sippers in China secured the
third place ranking in terms of the value of shipments and
saw a 20% plus rise in their value of shipments to Japan.
In August Italy featured as major shippers of wooden
kitchen furniture but the value of shipments from Italy was
down sharply in September as many manufacturing plants
in Europe were still closed for the summer holidays.
September 2024 wooden bedroom furniture imports
(HS 940350)
From mid-2024 there has been a steady decline in the
value of Japan’s imports of wooden bedroom furniture
(HS940350) and this drop in the value of imports
continued into September. The most plausible explanation
for the long down trend is the end of the boom in
establishing accommodation for the wave of tourist
arrivals this year.
The top shippers of wooden bedroom furniture to Japan in
September were China (64% share of September import
values) Vietnam (28%) and Malaysia (4%). Italy and
Poland were significant shippers in August but this was
not the case in September. Month on moth the value of
September arrivals of wooden bedroom furniture was little
changed from the value of August arrivals up year on year
the value of September 2024 arrivals were down 8%.
September 2024 wooden furniture parts imports (HS
940391)
Japan imports wooden furniture parts from a large number
of suppliers and while suppliers in Asia account for a large
proportion of imports there are significant imports from
European member states.
The top four shippers in September were China (46% of
total HS940391 imports) Indonesia (17%), Vietnam (10%)
and Malaysia (10%). September arrivals from China were
up 8% month on month but arrivals from Indonesia were
down 6%. Arrivals from both Vietnam and Malaysia were
down month on month but shippers in Germany, Italy and
Thailand did well in September.
Year on year, the value of September imports of wooden
furniture parts into Japan was down 9% but, compared to
August arrivals in September were almost unchanged.
Trade news from the Japan Lumber Reports (JLR)
The Japan Lumber Reports (JLR), a subscription trade
journal published every two weeks in English, is
generously allowing the ITTO Tropical Timber Market
Report to reproduce news on the Japanese market
precisely as it appears in the JLR.
For the JLR report please see:
https://jfpj.jp/japan_lumber_reports/
Restart operation to produce domestic lamina and
wooden chip
Kawai Ringyou Co., Ltd. in Iwate Prefecture has
completed renewal work on production lines for domestic
lamina and wooden chips at its one of plants, Shizukuishi
plant, and started an operation.
The plant will be able to consume 1,200 – 1,300 cbms of
logs by one shift in a day. Monthly consumption of logs
will be about 30,000 cbms and annual consumption will be
360,000 cbms.
To respond Work Style Reform and to solve s labor
shortage, the company decided to renew the equipment at
the plant. The company will manufacture large diameter
cedar logs for Wooty Kawai Co., Ltd.’s domestic
laminated structural lumber to expand supply. Wooty
Kawai is one of Kawai Ringyou’s related companies in
Iwate Prefecture.
The former Shizukuishi plant used to consume about
200,000 cbms of logs annually and it had been fifteen
years in an operation. The company decided to remove all
equipment at the plant and built a new plant on site
adjacent to the former plant. Then, the company installed
cutting edge production lines. The new equipment is able
to consume about 1,000 cbms of logs by one shift in a day.
3.65 m or 4 m length and 14 – 50 cm diameter of logs are
put into the new equipment.
As for manufacturing large diameter logs, about 250 cbms
of logs will be consumed by one shift in a day. The length
of logs will be 2 m, 3.65 m and 4 m. The diameter of logs
will be 20 – 80 cm. There are 36 employees including
office staff at the plant and the company did not increase
or decrease the employees. All edged tools at the plant are
polished by the company. Now, 4 m log occupies 95 % of
all products and large diameter log occupies 20 – 30 %. 95
% of cedar log is used and 5 % of larch is used at the
company. However, the company will expand consuming
more Japanese red pine and Larix.
Production of domestic structural lumber of Wooty Kawai
in 2023 is about 90,000 cbms and it will be 108,000 cbms
in 2024.
Plywood
Inquiries to domestic plywood for recutting recovered in
September and October 2024 and shipment was
increasing. Workdays in October are more than September
so and the actual demand increased. Movement of
domestic plywood recovers but the price of domestic
softwood plywood is in a bearish tone and has not
bottomed out.
Prices for 12mm 3 x 6 domestic structural softwood
plywood decreased to 1,030 – 1,050 yen delivered per
sheet in the middle of October 2024 in the Tokyo
metropolitan area.
The price in some local areas was 1,000 yen, delivered per
sheet. One of reasons for, the decrease is that there had
been competitions between precutting plants to get orders.
Also, there were battles over market share of plywood
between plywood manufacturers due to the less new starts.
The price of 12 mm painted plywood for concrete form
from Malaysia was USUS$20, C&F per cbm high in
August and September, 2024.
Some thin plywood made of natural wood from Indonesia
is USUS$50, C&F per cbm, high and medium thickness
plywood is USUS$20, C&F per cbm high.
A ringgit and a rupiah are strong against the U.S. dollar in
October, 2024 and manufacturers in Malaysia and
Indonesia have less profits. They expect to raise the selling
price of plywood strongly.
12 mm 3 x 6 painted plywood for concrete form is
USUS$600 – 620, C&F per cbm. Plywood form is
USUS$510 – 530, C&F per cbm. Structural plywood is
USUS$520 – 540, C&F per cbm. These prices are
stabilized from last time.
Domestic logs and lumber
Movement of domestic lumber is also sluggish in October,
2024. In northern part of Kanto, there are still logs which
are damage from insects.
Production of raw logs is low and the inventories of cedar
and cypress logs are decreasing. Some lumber plants are in
a precarious day-to-day situation due to less logs.
However, there are fresh logs and the log market has been
rising. Cypress sills and posts are in short supply. KD 105
mm cypress sill is 70,000 yen, delivered per cbm. KD 105
mm cypress post is around 67,000 yen.
The log price in the northern part of Kanto is skyrocketing.
The inquiries do not increase even though the lumber
market is low due to less logs.
Cedar log for a post is 15,000 yen, delivered per cbm in
Tochigi Prefecture. Medium sized cedar log is 16,800 yen,
delivered per cbm and this is 2,000 yen more than last
month.
Cypress log for a post is 18,000 yen, delivered per cbm
and for a sill is 20,800 yen, delivered per cbm. This is
1,000 yen higher than the previous month.
Medium sized cypress log is 25,000 yen, delivered per
cbm and this is 5,000 yen higher than last month.
3.65 m cedar log is 12,000 yen, delivered per cbm in
Akita Prefecture. 3 m cedar log for a post is 14,000 yen,
delivered per cbm in Kyushu region and this is leveled off
from last month. 4 m cedar log is 14,500 yen, delivered
per cbm and this is 500 yen less than last month.
3 m cypress log for a post is 19,000 yen, delivered per
cbm in Chugoku region and this is 1,000 yen down. 4m
cypress log for a sill is 20,000 yen, delivered per cbm and
this is 500 yen down.
Slight rebound in PKS price
The price of PKS, which is imported fuel and consumed at
woody biomass power plants or thermal power plants,
increased slightly in South Asia.
The spot price of Indonesian certified PKS in August,
2024 was US$80, FOB per ton. However, the spot price
increased to US$85-90, FOB per ton in September and
increased to US$90-95, FOB per ton in October, 2024.
Some South Asian shippers offered US$100, FOB per ton.
The spot price of Vietnamese wooden pellet is US$128-
130, FOB per ton in Vietnam and this is US$3-5 more
than the previous month.
The reason for the price hike is that production of PKS
decreased because heavy rain occurred in Indonesia and
Malaysia. It was the best time for harvesting palm trees.
Palm oil plants and South Asian shippers raised the spot
price. The futures price of PKS is US$120-128, FOB per
ton in South Asia.
The inventory of imported fuels such as PKS or wooden
pellets in Japan was once over-stocking but the inventory
is proper volume. There are inquires for imported fuels to
trading companies. However, the fire occurred at a large
wood biomass power plant and the operation was stopped
so demand for imported fuels has not fully recovered yet.
Also, there were failures at other wood biomass power
plants and it is unable to start an operation.
On the other hand, the spot price of Vietnamese wooden
pellet is gradually rising due to a typhoon, which
influenced the production, in September, 2024. Also,
demand for wooden pellets in Europe has increased.
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