Plywood makers halt orders from Japan

File pic shows Malaysian plywood undergoing quality tests before being exported.

KUCHING: More Malaysian plywood manufacturers have stopped taking new orders from Japanese buyers as the log shortage has disrupted their production activities.

The latest is Sabah’s largest tropical plywood manufacturer which halted from accepting new orders in May 2021, and this has resulted in severe supply shortage of the panel products in the Japanese market, according to the Japan Lumber Report (JLR).

In March, Sarawak’s top plywood manufacturer and supplier Shin Yang group had stopped taking new orders from Japanese importers to clear up the backlog orders.

“The supply of imported South Sea (tropical) hardwood plywood is in critical stage.

“The largest supplier in Sabah stopped taking new order in May because of shortage of log supply and workers, ” said JLR in its latest bi-monthly publication reproduced by International Tropical Timber Organisation (ITTO) Tropical Timber Market report (June 16-June 30, 2021).

The JLR said other Malaysian suppliers’ offer volume is minimal as “they were also hit by log shortage, resulting in delayed shipments to Japanese buyers thus becoming a new normal.

“Then, since June 1, Malaysia is locked down for two weeks (to curb the spread of Covid-19 pandemic) which further reduces log supply, ” it added.

Japanese importers had earlier anticipated log supply in Malaysia to increase after the raining season is over in March-April, thus bring down the export prices and volume of plywood.

Statistics from Japan Finance Ministry revealed that Malaysia is the largest supplier of tropical plywood to Japan, with shipments of 285, 700 cubic meters (cu m) in the first four months of 2021, an increase from 277, 800 cu m in the corresponding period in 2020.

During the Jan-April 2021 period, Sarawak exported 65, 870 cu m of plywood worth about RM138.4mil to Japan, according to the exports data from Sarawak Timber Industry Development Corp (STIDC).

Malaysia has taken over from Indonesia as the top supplier of hardwood plywood to Japan as the latter had reduced its exports to Japan to 229, 000 cu m from 287, 000 cu m during the same period.

Vietnam and China are also hardwood suppliers to Japan, with shipments of 57, 500 cu m and 33, 600 cu m respectively in the Jan-April 2021 period.

The JLR noted that “As Indonesian plywood manufacturers are also suffering from log supply shortage, and with brisk orders from North American importers, there is no chance that the export volume for Japan would increase.”

According to the report, tropical hardwood plywood suppliers have continued to raise the export prices of their products such as 3x6 coated concrete forming panels and 12mm panel to Japan.

Consequently, major Japanese manufacturers and dealers have raised the sale prices of their products such as composite floor and ceiling board with tropical hardwood base by 10% and 20%.

“Supply shortage of imported wood products is getting severe since last March, and substituting materials are scrambling, so the prices keep soaring with no end.

Meanwhile, the softwood plywood manufacturers have also announced price hike since June.

The new price is 1, 000 yen per sheet delivered on 12 mm 3x6 (panel). The manufacturers’ inventory remained low while orders are increasing, ” said JLR.