May 11, 2018

No. 719

Japan’s wood products export in 2017

Douglas fir export prices dropped

Total value of wood products export in 2017 was 32,647
million yen, 37% more than 2016. Main factor is increased
export of logs to China and rapid expansion of cedar lumber
export to the U.S. market.
Log export to China was 776,004 cbms, 61.8% more than
2016 with the value of 10,299 million yen, 83.5% more.
The value has been increasing year after year. Unit price per
cbm in 2015 was 12,212 yen then 13,271 yen in 2017.
89.7% of logs exported for China was cedar. They are used
for crating lumber, concrete forming panel and materials for
public works construction so the prices are more important
than the quality but demand for low priced logs in Japan has
been climbing with increasing starts of biomass power
generation facilities. Present log prices for biomass fuel are
7,000 yen per cbm delivered chip yard while export cedar log
prices are 8,000-9,000 yen per cbm delivered port so fuel log
prices may push export low grade log prices up higher.
China eyed the U.S. market for export of cedar lumber thenJapan also started exporting rough cedar lumber for the U.S.
market mainly for fencing. The U.S. market prefers darkcolored sap wood and black core, which Japan market does
not like. Also cedar has strong water resistance anddurability for exterior use.
Cedar lumber export to the U.S. market in 2017 was 15,000
cbms, four times more than 2016.
Korea prefers Japanese cypress to cedar. Cypress is mainly
used for interior finishing. In Korea cypress is believed to begood for health. Cypress price is higher than cedar so thatexport value for Korea is higher than China. An average unit
price for Korea was 17,384 yen per cbm as against 13,271 yenfor China.
For Taiwan, log export volume is declining but lumber
export continues expanding.
Majority of shipping ports are in Kyushu, where is closer toChina and Korea geographically.

For May shipment, Supplier’s export prices of North
American Douglas fir logs are down by $10 from April prices
on all the sorts.
There is no factor to reduce the prices as North American
lumber market continues strong and demand for logs is very
active but the largest Douglas fir log supplier considers toughsituation Japanese Douglas fir log sawmills and decided toreduce the prices.
This is the first price drop in 22 months. SS sort prices are$1,050 per M Scribner FAS. IS sort prices are $1,030 and SLC
prices are $1,020.
For the Japanese sawmills, the cost is up despite FAS
reduction because the yen is weakening and ocean freight isup so that the cost is up by 500-600 yen per cbm from April
and this is about 1,000 yen higher compared to the bottom
prices.
FAS prices had been held unchanged from January
shipment and the cost was down by strong yen but now theyen is depreciating again with higher ocean freight. Douglas
fir sawmills raised the lumber sales prices in March for squareand side cut but prices of main product of beam remained
unchanged because of competition with European redwood
laminated beam..
North American lumber market prices dropped once inMarch then they rebounded again and weighted average
prices of 15 structural lumber in the last week of April are$506, $8 higher than previous week and are getting close tothe record high prices of $512 so log prices stay up high evenwith increased log production.
The supplier says that there is ample log inventories forexport and log production is steady, which is reason forcompromise.
In Canada, stumpage in B.C. climbed and some log
suppliers reduce the production so log supply is getting tightand log prices in open market continue strong. This tightens
block for export so export log prices continue climbing.

Trend of wood products export
Items
2015
2016
Logs
469,685479,741
China
Lumber
26,77445,724
Logs
144,362
103,078
Korea
Lumber
7,869
7,856Logs
1584
Philippine
Lumber1918,853
20,331
Logs
74,586
61,410
TaiwanLumber
1,966
4,401
Logs
---U.S.A.
Lumber
64
3,359
Logs
2,410
5,348
Vietnam
Lumber
2,593
3,657
Logs
511
489
OthersLumber
2,338
2,035
Logs
691,589
650,150
Total
Lumber
60,45787,363
Unit : cubic meter
Comparison : %2017
776,00962,629132,985
8,765-32,342
55,412
6,389-13,040
5,516
5,008
625
1,822
970,547
129,959‘17/’16
161.8
137.0
129.0
111.6
-159.1
90.2
145.2-387.1103.1
136.9
127.889.5
149.3
148.8

Busy demand of PB for floor
Demand of particleboard for floor standing (floor forconcrete condominiums, which is placed on concrete slab
with vibration proof supporting bars with rubber) is
temporarily slowing in April but the demand should continue
strong as there are constructions of many new large concrete
condominiums.
20 mm thick 2x6 is used for this purpose but supply of thissize is tight and other sizes like 25 mm thick and 3x6 are used.
PB manufacturers are running fully but they manufacturesother products so this size is chronically short in supply.
Tokyo Board Industry’s new Sakura plant has started
manufacturing since late March and it is operating 24 hours a
day since April 10 to catch up busy demand.