KUCHING: Sawmillers in Sarawak are seeking to raise prices of plywood products for shipment to Japan amid tight supplies and rising log prices.
They are proposing a price increase of between 5% and 6% for shipment in January. This is on top of double-digit increase in prices over the last 12 months.
The new prices are US$30 per cu m higher than the current prices, according to the latest International Tropical Timber Organisation (ITTO) Tropical Timber Report.
“Present market prices of 3x6 JAS coated concrete forming panels in Japan are about 1,350 yen (US$11.90) per sheet delivered but the inventories in distribution channels are very limited. So distributors have to accept US$600 (per cu m) prices as even shipment of contracted volume is largely delayed,” it said.
ITTO attributed the rising Sarawak plywood prices to firmer log prices due to low production because of unfavourable weather.
Major plywood manufacturers in Sarawak, the report said, have order backlogs that goes back to six months due to delay in production and shipments.
The report said plywood mills were forced to reduce production due to log supply shortage.
TA ANN HOLDINGS BHD, a key exporter of plywood to Japan, is upbeat about the market in that country.
“Given the low plywood inventory in Japan, coupled with the infrastructure construction works for the coming Olympics (in 2020), which has accepted the company’s plywood products for the said construction works, we expect the timber market to rebound,” said Sibu-based Ta Ann in notes to its latest quarterly results ended Sept 30, 2017.
In the first six months (2017), Malaysia exported RM11.5bil worth of wood products, with Japan and US as the key markets.