Plywood imports in September dropped sharply and were down to about 202,300 cu.m, 36% less than in August and 25% less than the same month a year ago. The high level of plywood imports following the March earthquake has now come to an end. Estimates of plywood arrivals for October are also low so the market, says the Japan Lumber Reports (JLR), should firm as inventories decline.

In September plywood arrivals by source were; Malaysia 63,000cu.m, 52% down from August and 49% down from September last year. Imports from Indonesia were72, 000 cu.m, 32% down compared to August and around 20% down year on year. Imports from China totalled 56,000 cu.m, almost 18% down on levels in August but still 19% up on September 2010 levels. The supply of plywood from Malaysia dropped by almost a third from the peak levels in May and supplies from China are now down by half. In September this year supplies from Canada were only 1,000 cu.m, 95% less than in the peak month of June. In late August, the plywood market virtually collapsed under the strain of huge imports and prices plunged, says the JLR. Today, plywood prices in the Japanese market are bottoming out and there has been a hint of a rebound for 12 mm concrete formboards. Importers estimate October arrivals at around 220-230,000 cu.m and say inventories are continuing to fall.

SE Asian log supplies tight
The JLR is reporting that log supplies in Malaysia remain tight and vary by region. In the regions of Malaysia where India is aggressively purchasing the supply is tight and the log prices are higher than in other areas. In Sarawak suppliers said to be asking more than US$330 per cu.m FOB for meranti regular logs.

Logs suitable for the Japanese market are also in tight supply but Japanese plywood mills are not chasing these high priced logs because of uncertainty in the Japanese plywood market and because they have adequate inventories of about three months supply.

Sarawak meranti regular log prices are US$285-300 per cu.m FOB, which is up by US$10-15 per cu.m. Meranti small log prices are ranging from US$250 to US$270 per cu.m FOB reports the JLR.

In recent months there has been an increase in ocean freight costs adding around US$1 per cu.m to the landed cost mainly because the number of loading ports for any one shipment has had to be increased, says the JLR.

Third supplementary budget plan by the Forestry Agency
The third supplementary budget includes money for restoration in Eastern Japan and for restoration work after the typhoon during the summer. Funds are also allocated for disaster prevention. Around Yen140 billion has been allocated for extension of the forest industry revitalization fund and for domestic forest maintenance. Part of this fund is to be used to subsidise transportation of thinnings from domestic forests reports the JLR.

Another Yen11.24 billion is for restoration of quake damaged wood processing facilities. This, it is estimated by the JLR, will be enough to restore about 50 plants in Iwate, Miyagi and Fukushima. Plans are also in place to utilise wood waste resulting from the damage caused by the earthquake and tsunami for power generation. Around Yen 9.5 billion has been allocated for this in the latest budget.

Housing starts rise after slowing in aftermath of the March disaster
Housing starts in July and August were over 900,000 units in terms of annual starts. The supply of homes has started to catch up after the slow down because of the March earthquake and negative effect of the termination of the house eco point system. The eco point system has now been re-introduced giving a boost to starts. September starts were 64,206 units, around 11% less than the same month a year ago and this was the first decline in six months. Seasonally adjusted starts were 745,000 units, 20% less than August, the lowest in two years.

The largest decline by category was rental units, 18% down, the lowest on record for the month of September. Owners’ units also dropped recording the first decline in three months and the second lowest in record. Condominium starts, which were the driving factor for housing starts recently also declined.

Japanese company to market FSC certified plywood
Jutec Corporation (Tokyo) will start marketing domestically made FSC certified softwood plywood from January next year. Jutec has been handling certified products since 2008. So far, the certified products have been imported but now the company will handle commodity softwood plywood.

Jutec acquired ISO 14001 in December 2005 and started marketing environmentally friendly products. It obtained CoC certification by both FSC and PEFC in 2009. Initially, imported certified materials were the main products such as FSC certified Indonesian and Malaysian plywood, Chilean radiate pine plywood, European OSB and Chinese radiata pine products.

The company also traded the first FSC certified domestically produced tropical hardwood plywood produced by Ofunato Plywood, however this plywood mill was destroyed by the tsunami in March this year. Since November this year Jutec started marketing FSC certified softwood structural plywood produced by Akita Plywood. Jutec trades a variety of hardwood and softwood panel products as well as imported and domestic products.

Nankai Plywood builds sawmill in Indonesia
The JLR is reporting that Nankai Plywood Co., Ltd. is building a sawmill in South East Java in Indonesia. The mill will be completed by March next year and will utilise plantation falcata. The mill will produce boards for lamination which will be sent to their Surabaya finishing plant. Nankai Plywood began its plantation development in 2006.

JapanLog and Sawnwood Prices in Japan

Wholesale Prices (Tokyo)