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JAPAN:Tropical Log Prices
¡¾2002.07.30¡¿

JAPAN:Tropical Log Prices

Despite the recent strengthening of the yen log prices in Japan have been going up steeply because of rapid rise in FOB prices. The current price for Sarawak meranti regular is yen 5,800-6,000 per koku CIF, yen 200-300 higher than a month ago. Compared to the price in the fourth quarter last year, which was at the lowest for years, current prices are yen 1,000 per koku or 20% higher. Small meranti is selling at yen 5,300-5,400 per koku CIF and Super Small is about yen 5,000, both up by yen 200 in a month. Importers are preparing to increase prices further to take account of new prices for July arrivals, as FOB prices are to go up again. Regular meranti prices are likely to exceed yen 6,000. Plywood manufacturers have been pushing up prices but log prices have shot up faster and ahead of the plywood price push so the mills still suffer a loss despite a step-by-step price increase. Mills say that concrete formboard plywood is below breakeven by yen 100 per sheet even with the new prices and there is no chance to breakeven even if Meranti small FOB is US$130 per cubic metre. In short, mills need to raise prices even more to cover the log costs. As local analysts point out, steep increases in log prices by suppliers may drive down demand, as there is little support in the market. In fact, China and Taiwan P.o.C are reportedly slowing down their purchase of tropical timber.