KUCHING: Malaysian plywood prices are on the uptrend in the Japanese market after posting double-digit gains last year.
Sarawak plywood mills have proposed a 5% to 6% increase in this month’s shipment. The revised export price is about US$600 per cu m (C&F) on 3in x 6in (3x6) JAS coated concrete forming panels and between US$520 and US$530 per cu m (C&F) on uncoated concrete forming panels.
The new prices are US$30 per cu m higher than that of December 2017, according to the recent 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$11.9) 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 added.
In January 2017, Sarawak plywood traders reported export price for coated formboard panels CP (3x6) FOB (free on board) at US$500 per cu m while it was US$430 for 3x6 concrete formboard panels CP (FOB).
For floor based panels (11.5mm), the export prices (FOB) rose to US$640 per cu m in November from US$540 per cu m in January, up by US$100 per cu m or 18.5%.
Sarawak’s standard panels (9mm and above) exported to South Korea fetched US$460 in November from US$395 cu m in January.
For similar product during the same period, the export price (FOB) to Taiwan and Hong Kong jumped to US$450 per cu m from US$400 per cu m while to the Middle East rose to US$440 per cu m from US$380 per cu m.
Itto attributed the rising Sarawak plywood prices to firmer log prices due to low production because of unfavourable weather.
“Before log production recovered, rainy season started since late October, and log production will stay low until rainy season is over in March.
“Major plywood manufacturers in Sarawak carry almost six months order files due to delayed production and shipments.
“Structural and uncoated concrete forming panels are rather easy to produce compared to coated panels while coated concrete forming panels need quality logs, which are hard to come by, so the manufacturing is limited.”
The report noted of tight supply of coated concrete forming panel and thin plywood due to the shortage of quality logs faced by the mills. These mills, therefore, churned out more structural and green concrete forming panels which do not require quality veneer.
According to the report, many plywood mills are forced to reduce production due to log supply shortage, and they decide what to produce depending on the quality of logs as the raw materials come in.
In the first eight months in 2017, Sarawak’s log production fell about 24% to some 3.79 million cu m from a year ago.
In Indonesia, Itto said plywood manufacturers were in the same situation as their Sarawak counterparts, as the former were also facing log supply shortage and climbing labour costs.
The Indonesian manufacturers are, therefore, following Sarawak’s move to raise export prices of plywood products.
“Market prices of imported plywood (in Japan) have been gradually climbing. Supply of thin panel and floor base (plywood) from Indonesia continues (to be) short.
“The shipments of imported plywood have been largely delayed by log supply shortage at producing regions where rainy season has started, so log supply will not recover until spring of next (this) year.
“Since shipment time is uncertain, the buyers in Japan commit whatever offers are made regardless of the prices,” said the report.
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.
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