The availability of imported plywood has not improved and supplies are said to be tight. Malaysian suppliers are looking for higher prices which are aiding the strengthening of the Japanese market price. This is especially as domestic manufacturers are determined to move prices higher.

Japanese plywood manufacturers are very serious about pushing plywood prices to profitable levels. Over the past two years prices have dropped so low that most companies could not even breakeven.

For the first time, Japanese plywood manufacturers are working together, says Japan Lumber Reports (JLR). At the moment, no manufacturer is offering discounts in order to secure sales. The pricing crisis has meant that all manufacturers have a common purpose.

House builders are aware of this determined stance by the manufacturers and are slowing accepting the new prices. 12mm 3x6 structural panels are priced at ¥ 690-700 per sheet delivered. Tongue and grooved thick panels, 24mm 3x6 will be priced at ¥ 1,360-1,400 from May.

If demand in May holds, JRL is projecting that prices for 12mm panels could rise to ¥ 750 per sheet.

Shift in Canada Japan trade
Canadian softwood lumber has become more expensive for Japanese importers because of rising freight charges and aggressive sourcing by Chinese companies. Now this situation is likely to get worse for Japanese importers as a result of changes in the rate of export duty charges on softwood exports to the US by the British Columbia provincial government in Canada.

While the duty rate was high, Canadian millers had diversified their markets but with good prices available in the US market and with the reduced export duty many are shifting back to the US market at the expense of the Japanese market.

Cash for ‘heat island’ study
Japan’s summer temperatures hover around 30 degrees for 2-3 months and in the cities the high temperatures create hot spots as buildings capture and radiate heat. This results in the so-called ‘urban heat islands’.

The Forestry Agency in Japan is about to undertake a ¥ 110 mil. study of the cooling effect of wood cladding on buildings. The first part of the study will be in Osaka according to the JLR.

The idea of taking advantage of the thermal insulation properties of wood to cool urban hot spots will, says the JLR, contribute to expanding the use of wood.

Housing starts and remodelling business
The tough economic conditions in Japan have hit housing starts which have driven down demand for wood products. The poor economy has also had an impact on the house remodelling sector. According to Yano Research Institute Ltd., the house remodelling market was valued at around ¥ 5,260 billion in 2009, down 9% from the previous year.

The peak in the remodelling business was seen in 2005 when the market was reported to be worth about ¥ 6,500 billion. Since then the size of the market has been declining.

However, at a time when housing starts are down almost 30% and other industry sectors are reporting market declines from 20%-30% year-on-year, the fall in demand for remodelling of less than 10% has helped timber suppliers to this market.

On the other hand, when looking at the details of expenditure on remodelling it becomes clear that currently consumers are opting to spend on repairs to household equipment and furniture rather than on building remodelling works. This segment of the overall remodelling market has seen a decline of around 20% since the economic crisis started.