KUCHING: The recent arrival of shipments from Malaysia and Papua New Guinea (PNG) has balanced the supply and demand of South Sea (tropical) logs in the Japanese market.
These shipments, which arrived in December and January, will be delivered to Japanese lumber and plywood manufacturers.
According to the Japan Lumber Reports (JLR), if the logs arrive as scheduled, it would be enough volume for the first half of 2025.
JLR reported that demand for South Sea logs for pallets or blocks for steel manufacturers remains low, while demand for shipbuilding remains firm.
The report also highlighted that the high labour cost in Southeast Asia is driving up South Sea log prices, although the stronger yen is mitigating some of the import cost increase.
“Movement of South Sea and Chinese lumber is sluggish due to the weak yen,” JLR added.
“Japanese distributors are not in a rush to purchase a lot of lumber because they have minimum volume for their job.”
The JLR report indicated that the North American logs and lumber markets in Japan remain sluggish, although orders to precutting companies have shown slight recovery.
The report also suggested that a price increase in European lumber could lead to a rise in Japanese Douglas fir lumber prices.
However, it acknowledged that domestic small-sized lumber prices remain low, pressuring precutting companies to lower their selling prices to meet consumer demand for these cheaper options.
JLR reported that plywood supply in the Japanese market rose 3.8 per cent to 403,000 cubic meters (cu m) in October 2024 compared to September 2024, marking the highest monthly volume for the year.
This increase is attributed to strong production and shipment volumes of domestic plywood in 2024.
Imported plywood volumes, on the other hand, remained relatively flat in October, marking the third consecutive month of decline.
The report detailed a rise in production and shipment of structural softwood plywood in October compared to the previous month.
However, it highlighted that stockpiles have risen for two consecutive months due to shipments exceeding production in August and September 2024.
While October saw increased shipments from several domestic plywood manufacturers, trading companies, and wholesalers, JLR cautioned that the overall plywood market remains sluggish due to persistently low new housing starts and floor areas.
JLR reported that the price of softwood plywood in the Japanese market had been declining until October 2024, leading to increased spot purchases from consumers and driving up actual demand.
However, imports of plywood into Japan fell in October compared to September, with Malaysian plywood imports experiencing the most significant drop – a 25 per cent month-on-month decline, marking the lowest volume since August 2023.
According to data from the Japan Finance Ministry, Japan imported 40,900 cu m of plywood from Malaysia in October, down from 54,500 cu m in September 2024.
The report attributed the decline in Malaysian plywood imports to the rapid appreciation of the yen after mid-July 2024, which discouraged consumers from purchasing 12mm Malaysian plywood.
Traditionally, Malaysia and Indonesia have been the top suppliers of hardwood plywood to Japan, followed by Vietnam and China.
