KUCHING: The traditional “close relationship” between Japan’s new housing starts and imports of plywood from Malaysia and Indonesia has been broken. So is such a relationship between the Japan’s housing starts and its imports of tropical logs, much of which is used to produce plywood.
“The first signs of a break in the housing and import relationship came in 2015 when plywood imports dipped sharply. “Another turning point was this year when plywood imports plummeted despite steady housing stock growth,” according to the latest International Tropical Timber Organisation (Itto) Tropical Timber Market Report (Sept 1-15).
The report said annual housing starts in Japan have been within a narrow range over the past six years. “Year-on-year, the volume of July (2019) plywood imports from all sources fell 13 percent and month-on-month, import volumes were flat. The top three shippers remain Malaysia, Indonesia and China.
“In July, shipments from China was down 5 percent year-on-year and there was an 18 percent decline in arrivals from Malaysia. July shipments from Indonesia was almost the same volume as in June,” it added.
Based on Japan Finance Ministry statistics, Japan imported 527,300 cubic meters (cu m) of plywood from Malaysia in the first seven months (2019),down by 78,700 cu m or about 13 percent from 606,000 cu m in the corresponding period of 2018.
From Indonesia, Japan bought 439,200 cu m of plywood, lower by 80,000 cu m or 15.5 percent from 519,200 cu m during the same period.
Japan imported 72,400 cu m of plywood from China,which was a decline of 12,300 cu m or 14.5 percent from 84,700 cu m during the same period under review.
One category of plywood —HS441875 — dominated Japan’s plywood imports and it accounts for more than 60 percent of all plywood imports in recent months..
According to trade news from the Japan Lumber Report (JLR), Japan’s monthly volume of imported plywood continued to be low this year, and January’s imported volume was over 250,000 cu. For three straight months from May, the imported volume has dropped to less than 200,000 cu m.
The decline in imported volume is attributed mainly to the inactive market in Japan. “The importers are unable to place orders for future cargoes because of high export prices and sluggish Japan market,” said JLR, whose report is reproduced by ITTO. Among inventories of imported plywood, the report said there are some short items and a balance is off by items.
“Port inventories are not high but the market does not feel any shortage feeling. Recent strong yen makes future cost down, so the market prices are further weakening.” Reviewing plywood supply in Japan in first half 2019 (H12019), JLR said total supply was about 2,916,200 cu m, which was a 5.6 percent decline from H12018.
“Domestic plywood supply is 1,618,100 cu m,1.1 percent more while imported supply is 1,298,000 cu m,12.7 percent less. “Shipment of domestic plywood exceeded the production but market of imported plywood continued stagnant with dull shipment.
“The volume from Malaysia was 475,200 cu m,12.3 percent less and Indonesia was 432,700 cu m,14.9less. Volume from China was 297,500 cu m, 9.1 percent less and others are 92,500 cu m, 15.6 percent less. Sluggish market in Japan and high export prices (from suppliers) make future purchase difficult,” said JLR,
In H12019, Japan’s shipment of domestic plywood was 1,643,800 cu m, which was an increase of 5.7 percent, out of which softwood plywood was 1,572,300 cu m (up by 6 percent). Structural softwood plywood was 1,477,000 cu m, up by 4.8 percent. Production of softwood plywood in June recorded the highest of 276,300 cu m and the shipment was 270,200 cu m, so June-end inventory was 142,200 cu m,only 8,600 cu m increase since last January.