At the beginning of January, many distributors were selling plywood at
lower prices and plywood movements continued to be slow, said the Japan
Lumber Journal.
It was noted that some producers in Malaysia and
Indonesia reduced plywood production for Japan, since producers
could not cope with the increasing production costs. Some
items were also relatively scarce.
Japan Lumber Reports (JLR) drew attention to the current
weakened state of the market and manufacturers’
pessimistic outlook for the first quarter due to slow
housing starts. Manufacturers are likely to curtail
production of domestic plywood and reduce imports of
plywood through March in order to reduce supply. JLR
indicated that log production in Sarawak and Sabah were
nearly 30% less than previous years and suggested that
there were some difficulties in filling ships with logs.
Regarding price trends, JLR noted the uncertainty
associated with prices for Sarawak meranti logs, since
there was limited demand from Japan. However, kapur
and keruing logs were being actively bought due to
sustained demand from China, which drove up prices for
these species. It was also anticipated that there would be a
further rise in ocean freight rates this year, thereby further
impacting the Southsea log market.
In November 2007, plywood imports dropped 41% from
November 2006 levels. JLR noted that plywood shipments
in November were the lowest in five and a half years.
However, December shipments were expected to be nearly
double those in November.
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