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Japan Wood Products Price and Market Reports 
16 – 30th Nov 2024

 


Japan Wood Products Prices
Dollar Exchange Rates of 
25th  Nov 2024
Japan Yen
154.19

Reports From Japan

 

 Inflation slowed in October
The Ministry of Internal Affairs reported consumer prices,
excluding fresh food, rose 2.3% in October from a year
earlier, down from 2.4% in September. That was above the
forecast 2.2%. The October data is likely to keep the Bank
of Japan (BoJ) on track to raise interest rates in December.

The BoJ has long held the view that its goal is a virtuous
cycle between wages and prices. However, the October
inflation figure could mean the Bank will not move too
fast or too far at once.

Most analysts expect the BoJ to continue with a “gradual
uptick” of interest rates as the Bank uses monetary policy
to keep the exchange rate from becoming volatile. The yen
weakened against the US dollar in November, hitting a
four month high of 156.74 on 15 November but has since
recovered slightly.

A leading indicator of service-sector inflation held near
3% in October offering further evidence that conditions
for another interest rate hike by the Bank of Japan were
falling into place.

While uncertainty over US president-elect policies clouds
the outlook, many analysts expect Japan's economy to
sustain a moderate recovery and help keep inflation
around the Bank’s 2% target.

See:
https://www.japantimes.co.jp/business/2024/11/22/economy/japa
n-october-inflation/
and
https://www.boj.or.jp/en/statistics/pi/cspi_release/sppi2410.pdf

Inflation triggered by a weaker yen weighs on
consumer spending
The Liberal Democratic Party-Komeito coalition reached
an agreement with the opposition Democratic Party for the
People (DPP) on an economic stimulus package which,
with opposition votes, secured parliamentary approval.
The DPP pushed for an increase of the limit for income tax
exemptions and temporary relief in the gasoline tax. The
package, worth 39 trillion yen (US$250 billion), features
energy subsidies and cash handouts to low-income
households as inflation triggered by a weaker yen
continues to weigh on consumer spending.

With inflation outpacing wage growth prompting
households to cut discretionary spending, the new package
aims to address the negative impact of inflation and
achieve the government’s goal of revitalising struggling
regional economies.

See:
https://mainichi.jp/english/articles/20241122/p2g/00m/0na/02900
0c

December interest rate increase anticipated
Many financial analysts anticipate the BoJoJ) will increase
interest rates in December as they see the impact of a
delay being a further weakening of the yen.

The Govenor of the BoJ said the Bank must phase down
stimulus in a measured fashion as keeping real interest
rates low for too long will accelerate inflation.

US/Yen exchange rate set to move
The likelihood of a progressive rise in interest rates by the
BoJ and the possibility of further reductions by the Federal
Reserve could drive a recovery of the yen to 130 against
the US dollar according to some writers.

Can economy transform to more ‘normal’ growth?
UBS, a multinational investment bank and financial
services company founded and based in Switzerland
recently published its ‘Japan Economic Outlook 2024-
2025’. This says Japan's economy is at critical moment to
transform from three decades of stagflation to "a mild
nominal growth" period.

UBS says Japan's economy has seen no nominal GDP
growth since the asset bubble burst in the early 1990s.
However, now UBS reports signs that nominal growth is
returning, with a shift in consumer expectations of wages
and price movements.

UBS point out " While this dynamic may not continue in
the event of unexpected negative shocks, such as a severe
recession in the US and/or China, our base case looks for
this transformation to be sustained despite global
headwinds (US mild recession and high uncertainties in
terms of geopolitical risk).”

See: https://www.ubs.com/global/en/investment-bank/insights-
and-data/2023/japan-economic-outlook-2024-2025.html

Hunting hidden property value
Global hedge funds and private equity firms are investing
in Japanese companies in a bid to unlock as much as yen
25 trillion (US$165 billion) in undervalued real estate held
by companies.

The hidden value of property on corporate balance sheets
is showing up as a theme behind some of the biggest
activist campaigns and mergers and acquisitions
announced in Japan this year.

See:
https://theedgemalaysia.com/node/735819?utm_source=Newswa
v&utm_medium=Website

Import update

Assembled wooden flooring imports

The value of assembled wooden flooring (HS441871-79)
in September recovered from the decline seen in August,
rising 14% but compared to a year earlier the value of
September imports of HS441871-79 were down 9%

As in previous months the main category of assembled
flooring imports was HS441875, accounting for 73% of
the total value of assembled flooring imports, the same
level as in August.

 The second largest category in terms of value was
HS441879 (16%) , a doubling of the value compare to
August and reflects higher imports rather than currency
weakness as the yen exchange rate was fairly stable in
September. The third category of import was HS441873
(9%) with the balance being HS441974.

Of HS441875 imports 45% was provided by shippers in
China, 22% by shippers in Italy and 20% from shippers in
Vietnam. The three other sources of assembled flooring
(HS441875) in September were the US, Malaysia and
Thailand.

Plywood imports
The volume of September plywood imports (441210-39)
was 130.998 cu.m, almost the same as in the previous
month but this volume represented a decline (8%) on
levels a year earlier.

In September, once again, plywood arrivals from China
and Vietnam were down compared to a month earlier.
Arrivals from Malaysia were almost the same as in August
so it was only shippers in Indonesia that saw a rise in
volumes in September.

As in previous months, of the various categories of
plywood imported in September HS441231 was the largest
accounting for 89% of the total volume of plywood
imports with the balance fairly evenly distributed across
the other HS codes.

Malaysia and Indonesia accounted for most of the
HS441231 arrivals. Shipments from Vietnam and China
were spread across the categories tracked except in the
case of HS4410 where China was the only shipper in
September. Other shippers appearing in Japan’s plywood
import statistics in September included Denmark, USA,
Thailand, Italy and France.



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/

Operating conditions of Forest Management
It has been five years since the forest management control
system started by using the Forest Environmental Tax as a
financial resource.

The number of managers has increased but there are still
not enough workers. Japan Forest Products Journal held a
survey through municipalities. 277 municipalities had
answered to the survey. 45.5 % of 277 municipalities say
that an assumption and a plan are behind the schedule.

Many municipalities answered "uncertain" to the
questions, which are "do you grasp the current situation?"
or "what is your prospect?".

The forest management control system is about
maintenances of private and planted forest under the
control of forest managers, who are certified by the
prefectures, by using the transferred tax.

There were not enough staff, who had specialized
knowledge of forest managing control, at government
offices before the system began. However, there are more
staff at the government offices than before but still a labor
shortage.

Large diameter timber for producing plywood
Akita Plywood Corporation in Akita Prefecture upgraded
the facilities and now works on producing plywood using
large diameter timber.

The company installed a ring barker, which is able to peel
maximum 80 cm diameter timber, at Mukaihama Plant 2
in April, 2024 and installed a rotary peeling machine,
which is able to cut maximum 100 cm diameter timber, at
Mukaihama Plant 1 in August, 2024. They are in
operations smoothly.

The company is prepared to accept many sizes of logs
from loggers and is able to manufacture large diameter
timber, which used to be manufactured into wooden chips,
into plywood.

There had been two ring barkers at Mukaihama Plant 2
and one of them was renewed. The new ring barker is able
to peel 2 m or 4 m length and 80 cm diameter logs.

There had been one rotary peeling machine at Mukaihama
Plant 1 and it had been 24 years. Then, the machine’s
electric components was discontinued and this is the
reason for installing the new rotary peeling machine. The
old machine could cut 70 cm diameter timber but the new
machine is able to cut maximum 100 cm diameter timber.
The cutting speed of the new machine is changed to 160 m
per minute from 125 m per minute. The productivity is
improved by 20 %.

Logs are peeled at Mukaihama Plant 2 and are delivered to
Mukaihama Plant 1, which is neighbor to Mukaihama
Plant 2, for cutting.

Sometimes over 70 cm diameter timber is delivered to the
company’s plywood plant but it is not a lot. However,
large diameter cedar logs in Akita Prefecture has been
increasing every year. To make a good environment for
the loggers to cut down the large diameter timber, the
company decided to upgrade the facilities.

Mahogany plywood
Tokyo Shinjuku Mokuzai Ichiba Co., Ltd. in Tokyo
Prefecture started to sell mahogany plywood. Mahogany is
used as a core of plywood and falcata is used on face and
back of plywood. The pull-out strength of nails is two

times stronger than all falcata plywood. The proof stress is
about 85 % more than all lauan plywood. Mahogany and
falcata are both from a plantation in Indonesia. The sizes
of plywood are 2.5 – 24 mm x 910, 1,220 – 1,820 and
2,440 mm.

Mahogany is one of the world’s three major precious
woods and is used for luxury furniture, musical
instruments and floors. It is hard and is easy to process and
exhibits dimensional stability.

The company sells not only wood products but also
plywood and gypsum boards at the market every month.
Many buyers visit the market and are able to touch the
company’s products.

If the company could explain about the products well at
the market, the buyers would understand how good the
products are.

The company struggled with selling all falcata plywood at
first but the company explained about the falcata plywood
to buyers. Then, the buyers started to purchase the all
falcata plywood. The new plywood is sold at only Tokyo
Shinjuku Mokuzai Ichiba. The wholesalers of mahogany
consider that mahogany is familiar to lumber dealers so
the mahogany plywood would be accepted easily.

There are several kinds of plywood such as all lauan
plywood, all falcata plywood and combination of falcata
and other material plywood. Requests for the price and
performance from construction sites are different so the
lumber dealers might suffer with inventory. The branding
of mahogany plywood is the company’s goal.
South sea logs and products

Movement of South Sea and Chinese lumber is dull
due to the unclear foreign exchange rates

Demand for lumber is weak because the end of the year is
drawing near but there are some inquiries for lumber. The
yen depreciated to 150 yen against the US dollar in
October, 2024 and many Japanese distributors watched
carefully about results of the general election in Japan and
the US presidential election.

As for large laminated boards, Indonesian laminated
lumber manufacturers expected to raise the selling price
but they gave up because the yen was weak against the US
dollar. The price of large laminated board stayed the same.
The price of Chinese red pine lumber in Japan is 130,000
yen, FOB per cbm. Indonesian Merkusi lumber is
125,000yen, FOB per cbm. These prices are leveled off
from last time.


Abbreviations

LM        Loyale Merchant, a grade of log parcel  Cu.m         Cubic Metre
QS         Qualite Superieure    Koku         0.278 Cu.m or 120BF
CI          Choix Industriel                                                       FFR            French Franc
CE         Choix Economique                                                        SQ              Sawmill Quality
CS         Choix Supplimentaire      SSQ            Select Sawmill Quality
FOB      Free-on-Board     FAS            Sawnwood Grade First and
KD        Kiln Dry                               Second 
AD        Air Dry        WBP           Water and Boil Proof
Boule    A Log Sawn Through and Through MR              Moisture Resistant
              the boards from one log are bundled                      pc         per piece      
              together                      ea                each      
BB/CC  Plywood grades. Letter(s) on the left indicate face veneer(s), those on the right backing veneer(s). Veneer grade decreases in order B, BB, C, CC, etc. MBF           1000 Board Feet          
              Plywood   MDF           Medium Density Fibreboard
BF         Board Foot F.CFA         CFA Franc        
Sq.Ft     Square Foot  PHND             Pin hole no defect grade
Hoppus ton     1.8 cubic metres              Price has moved up or down

Source:ITTO'  Tropical Timber Market Report


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