Semi-Monthly Sunday, January 31, 2016 ISSN 0021-4477 Volume 57 Number 2 U.S. forest products industry mission to Japan 2015 The U.S. Forestry Industry Mission lead by Paul Owen, the president of Vanport International, made its annual visit to Japan. 27 mission members visited the related governmental agencies, organizations, and wood-related companies to deepen exchanges with Japanese parties concerned through sharing views on various topics and had annual meetings with the Japan Federation of Housing Organizations and the Japan Lumber Importers’ Association (JLIA) at Hotel Okura in Tokyo on December 8. In the meeting, the first presentation was made by Kiyotaka Okada, the Executive Director of JLIA, titled “Wood Products Supply and Demand and Future Outlook in Japan.” Mr. Okada explained trends of housing starts and wood import, the current situation of utilization of Japanese timber, and others. Japan’s import of American logs for January-October 2015 decreased 12.3% over a year ago, and that of American lumber dropped 13.4%. “Decrease in demand is going on with logs for plywood and square lumber for purlin and cross beam. In 2016, import of laminated lumber from Europe is expected to Hot Topic: The Ministry of Agriculture, Forestry and Fisheries was allocated 400.8 billion yen in the supplementary budget for FY 2015, within which the budget related to forestry was 59.2 billion yen.>> Page 2 Copyright © 2016, JLJ Inc. increase and I think that competition for market share will become more intense,” commented Mr. Okada. Kevin Binam, President and CEO of Western Wood Products Association, gave a presentation on behalf of the delegation, showing construction forecasts for 2015 with 660,000 units of detached houses, 457,000 units of condominiums, 65,000 units of prefabricated houses (including portable building and others). He told that the housing construction in the US had been returning to the normal level of 1,000,000-1,500,000 units. Lumber production is growing in the south and wood imports from Latin America are increasing, he pointed out. US exports of wood are decreasing and the amount of export to Japan in 2015 is 282,000 cubic meters, mentioned Mr. Binam. In a free discussion session, the US side asked questions such as, “How is LVL made of cedar used in Japan?”, and “What kind of policies are taken to promote domestic wood?”, and an attendee from Japan answered. The Japan side asked the question, “Why is the lumber production increasing in the south?” The US side answered that the economic growth has been high in the south and that there has been an increase in production capacity due to an entry (Continued on Page 2) Japan Lumber Journal Sunday, January 31, 2016 Page 2 of the Canada’s large corporation. At the end of the session, Yasunobu Kitaohji of POLUS-TEC Co., Ltd. joined as a guest and offered information of the lumber products the company uses at its pre-cutting factory. American Softwoods Japan Office h o s t e d “ A m e r i c a n Wo o d 2 0 1 5 Reception” after the meeting, and the delegation members and invited Japanese parties concerned deepened exchanges while enjoying a meal. :Government: Supplementary budget for fiscal 2015 emphasizes on TPP related measures Following the supplementary budget bill that was approved at a cabinet meeting on December 18 last year, the Ministry of Agriculture, Forestry and Fisheries was allocated 400.8 billion yen (144.8 billion yen for public works and 256.0 billion yen for non-public works). Within that amount, 312.2 billion yen was set aside for costs related to measures responding to the TransPacific Partnership (TPP). With this supplementary budget, the ministry will focus on the following points: 1) promotion of measures based on the “general principles of policies related to TPP”, 2) promotion of measures based on the “plan to create vitality for agriculture, forestry, and fishery industries and for region “, and 3) promotion of disaster prevention and disaster mitigation measures, and efforts will be put into policies that carry out these points. Concerning items related to forestry, a total of 59.2 billion yen (27.7 billion yen for public works and 31.5 billion for non-public works) was appropriated. Within this amount concerning measures regarding TPP, 29.0 billion yen was allocated for “projects and measures (funding) to strengthen productivity of plywood and lumber products”. Under a new international environment due to TPP, support will be given to projects such as maintenance of road networks and production of wood material gathered from forest thinnings in order to supply logs stably to facilities that will be equipped and maintained such as plywood factories and lumber product factories with the purpose of strengthening the structure and productivity. For implementing these targeted projects, a subsidy within half the cost of the project will be paid. As a policy objective, the amount of supply and use of domestic wood will be increased to 39.00 million m3 in fiscal 2020 (21.74 million m3 in fiscal 2013); good results are expected from strengthening the production structure by the project. Furthermore, because the implementation of government measures concerning illegal logging have been defined under the TPP Agreement, 200 million yen was allocated for “emergency measures for illegal logging”, and measure will be made to promote the use of legal lumber and to collect information from sites involved in illegal logging. With these steps, the percentage of certified legal lumber among lumber imports will be increased from 38% in fiscal 2014 up to 70% in 2020. For “special support for lumber products”, which was allocated 100 million yen, support will be given to activities that promote sales of exported lumber in export destination countries; activities include developing specifications for new lumber products for export, conducting trial production and improvement of lumber products, creating a marketing brand for lumber products produced in Japan, displaying lumber products, and gathering and providing market information. In other areas, the budget allocated 1.8 billion yen for “emergency measures to expand the use of regional wood material”, 300 million yen for “measures for the development of human resources for forestry” to ensure new forestry workers, and 100 million yen for “emergency measures regarding damage caused by deer and projects for capture”. Among public works projects, the budget allocated 17.1 billion yen for “projects for forest maintenance” including forest thinnings and 4.9 billion yen for “afforestation and forest conservation projects”. <Production amount was forecasted to maintain with the enactment of the TPP> At the end of last year, the Ministry of Agriculture, Forestry and Fisheries announced the results of trial calculations of every item that is related to the effects of the enactment of TPP. According to the results concerning plywood, the price of imported products, after the repeal of tariffs, will decline equivalent to the value of tariffs, so from the viewpoint of maintaining competitiveness, the price of domestic products will also decline, and the domestic production value will decrease about 21.9 billion yen. However, the amount of domestic production as well as the income of producers are expected to be maintained because a condition of being able to gain a profit will (Continued on Page 3) Japan Lumber Journal Sunday, January 31, 2016 Page 3 be made by properly working to improve productivity and to strengthen the structure due to “projects and measures to strengthen productivity of plywood and lumber products”, which was included in the supplementary budget. :Forecast: The estimate of construction investment for fiscal 2015 The Ministry of Land, Infrastructure, Transport and Tourism released its estimate of construction investment for fiscal 2015. According to the report, the construction investment for fiscal 2015 is expected to decrease 5.5% from the estimated figure for fiscal 2014 to 48.46 trillion yen. In detail, governmental investment will be 20.16 trillion yen (down 14.2%), and private investment will be 28.3 trillion yen (up 1.8%). By categories of building and civil engineering, building investment will be 25.93 trillion yen (up 0.3%) and investment for civil engineering will be 22.53 trillion yen (down 11.4%). The estimate of construction investment is based on expected turnover of the all construction projects throughout Japan. The reference for the governmental investment is the government economic outlook, the budget and execution progress of the public projects, and local finance plans, and that for the private investment is housing starts and construction statistics, the government economic outlook, and others. The construction investment does not include private maintenance work such as remodeling. The construction investment has been in a downward trend, after it hit a peak of 84 trillion yen in fiscal 1992. It dropped to 42 trillion yen in fiscal 2010, half of the peak, but afterwards it slightly recovered due to the demand for rehabilitation and reconstruction following the Great East Japan Earthquake. It is estimated to reduce from the previous year ’s figure in fiscal 2015 as a whole. Although there is governmental investment related to the reconstruction budget and the supplementary budget for fiscal 2014, public works in the civil engineering sector is decreasing. The investment in the housing sector is expected to increase 1.3% from the estimated figure for fiscal 2014 to 15.39 trillion yen. Private investment is forecast to recover, sharing 14.84 trillion yen (up 1.9%). On the other hand, the investment in the non-housing sector is estimated to decrease by 1.1% to 10.54 trillion yen, of which governmental investment in particular is expected to fall sharply (down 14.3%) to 1.74 trillion yen. But private investment is anticipated to increase 2% to 8.8 trillion yen since the increase in capital investment can be expected, with the economic recovery being felt and business confidence being improving. The investment in the remodeling and renewal of buildings for fiscal 2015 is estimated to be 11.23 trillion yen (up 6.7% from the estimated figure for fiscal 2014), which is shared 41.8% by the housing sector and 58.2% by the non-housing one. JAPAN DIY HOMECENTER SHOW 2016 August 25-27 2016, Makuhari Messe (location; Tokyo suburb) Exhibit Categories including; Building Materials/Timber, Interior Materials / Home Furnishing Goods, Exterior Goods, Gardening / Agricultural Materials, etc. Organized by JAPAN DIY INDUSTRY ASSOCIATION URL:http://www.diy.or.jp For exhibit inquiry, please contact: Overseas OperationOffice SPACE MEDIA JAPAN CO., LTD The briefing for the JAPAN DIY HOMECENTER SHOW 2016 was held Kosaikaikan Bldg. 2F., 5-1 Kojimachi, Chiyoda-ku, Tokyo 102-0083, Japan Tel.(81)3-3512-5670 Fax.(81)3-3512-5680 URL:http://www.smj.co.jp E-mail: [email protected] Japan Lumber Journal Sunday, January 31, 2016 Page 4 :Wholesalers’ view: smooth after the start of the new year, and shortage of logs at plywood factories is over. Southsea timber market in January (Continued on Page 5) According to the document released by the Tokyo chapter of the Japan Southsea Lumber Conference, as for conditions in producing areas in December, the rainy season has started in Indonesia. The water level in the river rose, and the transportation of logs are smooth. As the transportation of logs that had been felled during the dry season has started, inventories of logs at plywood factories are on the rise. Transportation is expected to be FOB of Southsea Logs 2015 Highest Lowest (US$ per cubic meter) 2015 2016 Nov Dec Jan 1st Week 1st Week 1st Week 300-304 275-279 284-288 275-279 275-279 (Small 70%, S.S. 30%) 255-259 237-241 Ocean Freight Sarawak 54.8 54.0 Yen/US$ *SQ = second quality, S.S. = super small 240-244 237-241 237-241 54.0 120.5 54.0 123.0 54.0 121.0 Sarawak Logs Meranti SQ-up Meranti Small Imports of Southsea Logs by Origin Supply/Demand of Southsea Logs (1,000 cubic meter) Southsea Logs Import 2011 2012 2013 2014 2015 YTD Jan. Feb. Mar. Apr. May June July Aug. Sep. Oct. Nov. Dec. As for orders from Japan, there is a stable flow of orders for floor bases, but there are not many orders Total Sabah SRWK 510.9 94.6 360.3 332.7 121.1 255.5 292.2 63.8 180.7 265.9 86.4 143.5 216.0 90.1 81.3 22.1 8.6 11.4 19.3 5.8 6.5 7.1 7.1 15.0 4.9 3.9 31.8 12.1 19.7 19.7 8.7 7.4 15.1 7.8 1.0 11.3 5.9 5.4 20.9 7.0 7.7 37.8 21.1 3.2 16.0 8.0 8.0 Slmn. PNG 42.5 58.7 18.5 115.8 21.3 67.0 4.5 55.8 16.1 28.6 2.0 2.8 4.2 6.2 3.6 3.8 2.4 2.4 3.8 3.6 9.9 - Import Total 510.9 332.7 2011 2012 (1,000 cubic meter) Southsea Logs Stock Demand Total for PW for Lbr 559.6 467.3 92.3 138.0 509.1 402.4 106.8 140.1 2013 2014 2015 YTD Jan. Feb. Mar. Apr. May June July Aug. Sep. 292.2 265.9 216.0 22.1 19.3 7.1 15.0 31.8 19.7 15.1 11.3 20.9 375.8 304.5 230.9 18.9 18.7 22.3 17.4 24.0 22.2 20.4 17.3 24.4 299.7 214.7 175.1 13.9 12.5 17.0 12.7 21.0 16.6 13.0 14.0 20.6 76.1 89.8 55.8 5.0 6.2 5.3 4.7 2.9 5.5 7.4 3.3 3.8 77.6 78.2 63.0 60.5 68.4 65.9 60.6 54.7 51.2 Oct. Nov. Dec. 37.8 16.0 23.2 22.2 17.0 16.9 6.2 5.3 65.7 59.6 97.0 84.7 Import Results of Southsea Lumber Products Overall Lumber Products YTD Lumber YTD y/y Processed lumber YTD y/y (unit: cubic meter; %) Free boards YTD y/y y/y 2015 Nov China Malaysia Indonesia 15,798 179,054 -20.5 7,331 555 7,688 15.6 5,018 53,102 -28.4 10,225 118,264 -18.1 79,671 -14.0 4,192 47,611 -13.8 2,805 27,018 -11.0 14,639 143,079 -4.6 1,746 16,496 -6.3 3,477 35,958 334 5,042 -28.3 7.8 9,416 90,625 25,394 -13.7 Vietnam 3,621 36,491 -9.0 345 2,242 0.2 714 8,855 4.6 2,562 Philippines 1,791 15,939 2.9 716 7,023 2.2 417 3,461 3.0 658 5,455 -8.5 3.6 Japan Lumber Journal Sunday, January 31, 2016 Page 5 for other items. It was decided that the minimum wages for workers will be raised by around 12% in 2016, and suppliers are becoming inclined to refuse the negotiations on lower product prices. In accordance with the decline in demand and lower selling prices in Japan, more suppliers are increasing sales of products for other countries. The raisin season has started in Sarawak and Sabah, Malaysia, and it has been raining in logging areas every day. There are not many days when logging work can be performed, and the log cut has been declining. Due to the year-end and New Year holidays, the number of workers available is declining, and prices of logs may increase after the start of the new year. However, the log inventories at factories are currently at sufficient level, and shippers are actively receiving orders for products. The arrival of Southsea logs in November was 16,017 cubic meters, and the arrival from Sabah and Sarawak are around 8,000 cubic meters each. The shipment was 22,163 cubic meters while the inventory was down to 59,555 cubic meters for 2.76 months. The actual import of Southsea lumber products in November was 8,057 cubic meters for lumber, 12,640 cubic meters for processed lumber and 23,887 cubic meters for free boards. The total of the import was 44,584 cubic meters. The arrival of lumber was down by 10.1% from the same month in the previous year while the arrival of processed lumber and free boards was down by 15.0% and 13.6% respectively. The declining trend continues for the arrival. :Wholesalers’ view: American timber market in January “Timber demand fails to increase in China, and the sales of used houses seem to have slowed down in the U.S,” said the chairman, Mr. Enokido, at the meeting of the Keihin chapter of the Japan North American Lumber Conference which was held on January 13 in Shinkiba, Tokyo, talking about the global timber demand which displays a sense of uncertainty. Under the circumstances, he made a prediction on the timber demand in Japan in 2016 and said that there would be a rush demand for timber in the latter half of this year before the increase in the consumption tax in 2017 while the market would remain quiet as it had been last year. Also, as keywords that can be used to consider the timber demand this year, he cited phrases such as “renovation of empty houses whose number is said to be 8 million units nationwide” or “renovation which utilizes the Japanese taste with a focus on travelers from abroad”. As for conditions in producing areas of North American lumber, the volume of spruce logging increases, and the supply of spruce is in excess. This is due to an impact of the price increase in the last year. However, there is not much demand in Japan, and the supply of lowgrade lumber is likely to become excessive. Purchasing activities are being suspended in China due to the lunar New Year, which is also damaging. The production of yellow cedar is low, and the balance between the production and sales volume is good. As for hemlock, the shipment for China is not good, and the low(Continued on Page 6) Movement of American Logs in Keihin Ports (Unit: cubic meter) Monthly Results in November Softwood Logs Hemlock Douglas Fir Spruce Arrival Shipment Ending Inventory *Inventory Rate 0 1,870 0 69 779 2 231 2,642 4 1.18 2.61 1.33 Overall Softwood Logs 1,870 850 2,877 *Inventory rate: Ending Inventory / Average shipments for the last 3 months **Since April 2015, semi-finished products are included in lumber products. 2.37 Wholesale Price of American Logs in Keihin Ports Logs RC No.3, 12"up (Alaska) YC pole, 6"up (Alaska) Sp No.2, 24"up (Alaska) Hem No.3, 12"up, Cascade Hem No.3, 12"up, Coast Hem, medium dia. 8/11 (J-sort) DF No.3, 12"up, Cascade DF No.3, 12"up, SS DF No.3, 12"up, Coast DF, medium dia. 8/11 (J-sort) Sept (1,000 yen / cubic meter) 2015 2016 Oct Nov Dec Jan 41.04 35.64 102.2 24.84 23.4 23.04 34.92 28.8 26.64 24.84 41.04 35.64 102.2 24.84 23.4 23.04 34.92 28.8 26.64 24.84 41.04 35.64 102.2 24.84 23.4 23.04 34.92 28.8 26.64 24.84 41.04 35.64 102.2 24.84 23.4 23.04 34.92 28.8 26.64 24.84 41.04 35.64 102.2 24.84 23.4 23.04 34.92 28.8 26.64 24.84 Japan Lumber Journal Sunday, January 31, 2016 Page 6 Movement of American Lumber in Keihin Ports (Unit: cubic meter) Arrival Monthly Results in November Small Square Lumber Hem 4-1/8" 4,483 Hem 3-9/16" 5,051 sub total 9,534 Other Lumber Products Hemlock Douglas Fir, SS Douglas Fir Yellow Cedar Spruce SPF Shipment Ending Inventory *Inventory Rate 2,777 9,982 7,318 2,224 1,010 46,727 4,565 5,008 9,573 4,996 5,238 10,234 1.13 1.18 1.15 3,321 10,889 7,033 2,601 1,337 47,647 8,505 16,311 8,235 6,211 3,349 8,703 1.56 1.94 1.68 3.49 2.62 0.18 Overall Softwood Lumber 81,350 83,629 65,341 *Inventory rate: Ending Inventory / Average shipments for the last 3 months 0.79 Wholesale Price of American Lumber in Keihin Ports Hem 105mm sq., roof beam, std Hem 105mm sq., roof beam, KD Hem 90mm sq., purlin, std. Hem 90mm sq., purlin, KD. Hem 45 x 90mm, batten products, KD DF 105mm sq., roof beam, Green DF 105mm sq., roof beam, KD DF 90mm sq., purlin, Green DF 90mm sq., purlin, KD DF 45 x 90mm, batten products, KD DF 45 x 60mm, batten products, KD YC 4-3/16" rough, HC YC 4-13/16" rough, HC YC 5x6W, random length, BC Clear Spruce 8-3/4" Clear Hem 6-1/2" Clear Nordic 3m x 27 x 105, stud, KD 㻿㼑㼜㼠 52 59 52 59 64 50 58 50 58 64 66 56 56 150 240 130 61 (1,000 yen / cubic meter) 2015 2016 Oct Nov 㻰㼑㼏 㻶㼍㼚 52 52 52 52 59 59 59 59 52 52 52 52 59 59 59 59 64 64 64 64 50 50 50 50 58 58 58 58 50 50 50 50 58 58 58 58 64 64 64 64 66 66 66 66 56 56 56 56 56 56 56 56 150 150 150 150 240 240 240 240 130 130 130 130 61 61 61 61 Supply/Demand of American Timber 2011 2012 2013 2014 2015 YTD Jan. Feb. Mar. Apr. May June July Aug. Sept. Oct. Nov. Dec. Log 3,078 3,048 3,420 3,093 2,324 193 174 254 187 240 234 150 271 163 233 225 Import Lumber Total 2,786 5,864 2,753 5,801 2,867 6,287 2,362 5,455 2,155 194 152 199 217 184 205 202 188 182 228 202 4,479 387 326 453 404 424 439 353 460 345 462 427 Consumption Log Lumber Total 3,129 2,751 5,880 3,059 2,766 5,825 3,421 2,837 6,258 3,073 2,430 5,503 2,394 236 172 274 164 247 236 201 167 266 270 161 2,176 207 157 195 208 215 213 200 182 169 219 211 4,570 443 329 469 372 462 448 401 349 435 489 373 (1,000 cubic meters) Stocks Log Lumber Total 258 207 466 248 194 442 269 223 492 288 155 443 245 247 226 151 243 242 191 295 192 156 219 142 138 142 151 145 137 140 146 159 168 159 388 385 369 303 388 379 330 441 351 324 378 grade products are in excess. There is an intention to sell them in Japan. However, they don’t sell in Japan as there is no demand for them. The problem in Japan is that upstream traders have inventories of highpriced products due to the timing of the currency exchange. The domestic market has been quiet since the start of the new year. The purchase activities by precut factories have become stabilized, and there is no major event which will change prices. Due to the warm winter weather which lasted till the year end, the logging operation for Japanese cedar and cypress went smoothly, and European lumber products in short supply, which some people have been talking about, seem to be adequately substituted by domestic products. As for prices of North American lumber products in January, prices of all items did not change from prices in December last year, and the market indications were also unchanged. As for the arrival and shipment of North American lumber products in November at Keihin ports, the arrival was 81,350 cubic meters while the shipment was 83,629 cubic meters with the inventory at the end of November standing at 65,341 cubic meters or 0.79 months. The arrival and shipment of Douglas fir small square and other products are good, and the arrival and shipment of small square continue to be 10,000 cubic meters for 3 consecutive months. As for logs, the conditions at sawmills have not changed much. As for prices in January, prices of both hemlock and Douglas fir were unchanged from December last year, and the market indications held from the previous month. (Continued on Page 7) Japan Lumber Journal Sunday, January 31, 2016 Page 7 :Wholesalers’ view: C o m m i t t e e o f To k y o L u m b e r Wholesalers’ Association was held Tokyo wholesale market for the first time this year on January 8th at Mokuzai Kaikan in Shinkiba. A in January person in charge of precut reported, “Factories were busily operated Lumber Price Market Investigation early in the new year because they have much work which was not Wholesalers' Market Prices in Kiba, Tokyo (lumber & logs 1,000 yen / cbm; plywood 1,000 yen / sheet; CP 1,000 yen / piece) completed by the 2016 end of last year.” 2015 January item grade Dec Some attendees JRC-Akita, narrow width board for rail special 1st 55 55 holding m e n t i o n e d JRC-Akita Taruki (rafter) KD special 1st 62 62 " “unclear outlook” JRC-Akita kowari lumber Air-Dried 0.24 0.24 " for lumber *JRC-Akita, laminated kudabashira (CP) 5-ply 2.3 " demand after JRC-Tokai, baby square for roof beam KD planed special 1st 70 70 " spring. Processing JC-Tokai, baby square for sill KD planed special 1st 100 100 " work of wood JC-Tokai, batten products KD planed special 1st 68 68 " batten products JRC-Kishu, baby square for post special 1st 58 58 " as well as JC-Kishu, baby square for post special 1st 92 92 " structural lumber JRC-Kyushu, baby square for post (3m) KD, bundle 55 55 " JRC-Kyushu, baby square for post (4m) KD, bundle 55 55 " is increasing at JRC-Kyushu, hirawari for mabashira (studs, 3m) KD, bundle 54 54 " precut factories. JRC-Kyushu, hirawari for mabashira (studs, 4m) KD, bundle 54 54 " “Demand for Ash, plain board dried, special 352.8 360.0 stronger green lumber Alaskan Spruce log No.3 118.8 118.8 holding really decreased,” DF log No.3 Coast 39.96 39.96 " a person involved Spruce, flitch Select Merch 90 90 " i n K y u s y u *DF, hirakaku, green (home sawn) 57 " timber pointed DF, hirakaku, KD (home sawn) 71 71 " out. From this DF, laminated beam (imported) 123 123 " year Douglas fir Redwood, laminated beam (imported) 79 79 " JRC&DF, hybrid laminated beam 78 78 " green ‘hirakaku’ Hem, baby square (imported, 4m*10.5cm*10.5cm) KD (S4S) 57 57 " was removed Hem, baby square (imported, 4m*4.5cm*10.5cm) KD (S4S) 60 60 " from the items DF, baby square (imported, 4m*10.5cm*10.5cm) KD (S4S) 57 57 " whose prices are DF, baby square (imported, 4m*4.5cm*6.0cm) KD (S4S) 60 60 " investigated at 72 72 YC, baby square (imported) green (FOHC) " the Committee 59 59 Hem, treated sill special 1st " meeting. Red Pine, Taruki (rafter, imported) KD 75 75 " I n N o v e m b e r, t h e a r r i v a l a n d shipment at the Kashima Port that supplies logs for the Kashima Factory of Chugoku Mokuzai Co., Ltd. returned to the regular pace, standing at 54,966 cubic meters. Red Pine KD Red Pine, stud (mabashira) Whitewood, stud (mabashira, imported) Whitewood, kudabashira (CP) WS, square edged (imported) Mercusi Pine, laminated lumber Yunshan Cedar lumber, KD Red Pine, laminated lumber Lauan plywood, Type II CF plywood, Type I (imported) Lauan structural plywood (imported) Softwood structural plywood, Type I (12mm) Softwood structural plywood, Type I (24mm) 1st KD, pithless 5-ply 1st, treated A-grade A-grade A-grade 1st, F4-star JAS (A), F1-star JAS, F4-star JAS, F4-star JAS, F4-star JRC=Japanese Red Cedar, JC=Japanese Cypress, DF=Douglas Fir, Hem=Hemlock, YC=Yellow Cedar, WS=White Seraya, CP=connective post, CF=concrete form * Price survey on the items has been done since January 2016. 65 72 64 2.25 180 150 245 145 0.61 1.38 1.49 1.10 2.27 65 72 65 2.25 180 150 245 145 0.61 1.37 1.46 1.10 2.27 " " stronger holding " " " " " weaker " holding " < J a p a n e s e Timber> Log output from Akita timber was smooth and the price of logs remained unchanged. There were not big orders for products in J a n u a r y. To k a i timber moved (Continued on Page 8) Japan Lumber Journal Sunday, January 31, 2016 Page 8 centering custom-made lumber, and the movement of wood batten products and fixtures was active. The price is not likely change at all. The prices of B-grade and C-grade logs from Kisyu and Owase timber is bullish but those of A-grade logs hovered at a high level. Sawmills suffered from the high price of logs. Supply of logs from Kyusyu timber is decreasing in the market and the amount of logs which are shipped directly to manufacturers from producing area is increasing. The prices of B-grade and C-grade logs used for biomass power generation are high. The logs used for purlin square and post through 2nd floor are in short supply. Precut factories were busy but the movement in existing route is not active so much. the price remained unchanged. <’hirakaku’> The movement of ‘hirakaku’ was active because precut factories have been busy since last fall. The price has entered bullish trend as low price disappeared. As for Southsea lumber products, the movement of lauan products started to move in January. The prices of products made in Malaysia are bullishly holding. For mercusi pine products, the price in Indonesia remained unchanged and inquiries are increasing in the domestic market. For red pine laminated lumber, the price increase is considered in China, and the inquiries are increasing in the domestic market as the movement recovered. <Hardwood> The movement of products in December slightly recovered. The amount of ash products is sharply decreasing as arrival of logs from Russia is cancelled. The wholesale price of ash products is increasing. <Imported Timber> The price of North American logs in producing area seems to have bottomed out. The price of logs for Japan slightly increased last December. Consumption of logs at domestic sawmills has not progressed as the demand for ‘hirakaku’ is decreasing. Output of logs has been stable at a low level. Alaskan spruce logs arrived in last December. The sales will start after the beginning of the new year, and the price is expected to remain unchanged. The use of spruce custom cut for non-residential buildings is expected to increase, but Inquiries for North American lumber products from precut factories were active. Log output in producing area is smooth and the price of products in the first quarter slightly decreased from the previous quarter. Production of hemlock KD products will start in January at producing area. Russian red pine lumber products have not arrived yet, so the movement was slow. Next arrival is expected after the middle of January. Arrivals of European lumber did not increase but extreme shortage has not occurred. The product price of 27mm X 105mm studs is slightly increased. European lumber market has been unpredictable since last year. <Plywood> Domestic softwood plywood is in short supply, so each factory is running at full capacity. The inventories at manufacturers at the end of November decreased to 124,000 cubic meters, and increasing number of traders mentioned shortages in the market. The arrivals of imported plywood in November remained at a low level (233,000 cubic meters), but the movement was still slow and there remains a feeling of oversupply in the market. Trading companies reluctantly dealt with small lot orders which were not worth the cost in the market. The wholesale price of imported plywood for concrete form and structural use is decreasing <Precut> Orders were favorable among precut factories in December and operations at factories continued until the end of last year. Factories had orders in the first half January, so they were still busy. Housing starts in 2016 are expected to be the same as in 2015. In addition, processing work of wood batten product at factories is likely to increase this year. :Statistics: Plywood supply in November Compiled by the Japan Plywood Manufacturers’ Association from the Ministry of Finance’s Trade Statistics, the amount of imported plywood in November greatly decreased to 233,000 m³ (18.6% decrease compared to the same month in the previous year). It decreased 14.2% compared to the previous month and returned to the same levels as last year’s sluggish summer reflecting the dull condition of the domestic market. Based on country, the amount from Malaysia, which has the largest amount of imports, was 96,000 m³ (27.5% decrease), and the amount from Indonesia was 70,000 m³ (7.4% decrease) decreasing for the 14 th consecutive month. The amount from China was 51,000 m³ (16.7% decrease) showing a 2-digit decrease for the 3rd consecutive month. The value of the imported plywood (CIF) in November was 15.1813 billion yen (15.9% decrease). According to Plywood Statistics compiled by the Statistics Department of the Ministry of Agriculture, (Continued on Page 9) Japan Lumber Journal Sunday, January 31, 2016 Page 9 tougher this year. of a shortage in the market. Forestry and Fisheries, the amount of production of regular plywood in November was 248,000 m³ (8.2% increase compared to the same month in the previous year) increasing for the 4 th consecutive month, but because the amount of shipments increased for the 7 th consecutive month to 258,000 m³ (16.8% increase), the amount of stocks at the end of the month decreased to 167,000 m³ (38.2% decrease). Among regular plywood, the amount of production of softwood plywood increased for the 3 rd consecutive month to 232,000 m³ (8.7% increase). The amount of shipments increased for the 7 th consecutive month to 243,000 m³ (18.2% increase), and the amount of stocks at the end of the month decreased to 124,000 m³ (45.3% decrease). The low level of stocks is becoming proof for a feeling The arrival of European softwood lumber products in November increased to 221,814 cubic meters, up by 44.7% from the previous year and up by 29.0% from the previous month. It was the first time in 3 months since August that the arrival hit the 220,000 cubic-meter level. As for the arrival by country, while the arrival from Romania made a significant decline, the arrival from other countries increased significantly. The arrival from main countries, Finland and Sweden, is strong, and the arrival from Austria is increasing steadily. :Statistics: European Timber News There has been a sense of supply shortage for European lumber products in the market since the beginning of the year. However, as domestic logs were felled smoothly and there is an abundant supply of domestic lumber products, items in short supply seem to be increasingly substituted by domestic lumber products. Due to a currency trend, euro-based European lumber is said to have an advantage over the dollarbased North American lumber, but the market share competition with domestic lumber is expected to get Amount of Imported Plywood by Countries Malaysia y/y Overall Amount of Imported Plywood Indonesia China y/y 2015 271,899 4.8 OCT 233,320 -18.6 NOV DEC YTD 2,680,526 -17.1 y/y 116,561 22.5 95,814 -27.5 87,888 69,939 1,126,117 -16.9 New Zealand y/y y/y -0.4 -7.4 51,586 51,218 -14.9 -16.7 1,905 71.6 2,645 -19.8 793,816 -16.7 597,580 -16.2 22,469 -48.0 The arrival of laminated lumber in November was 52,393 cubic meters, up by 6.0% from the previous year. It was up by 5.8% from the previous month, and the arrival which had declined made a slight recovery. As for the 3 a r r i v a l b y c o u n t r y, m;% while the arrival Taiwan from Finland made a y/y significant recovery, 577 -67.5 the arrival from Austria 590 -55.8 has been on a declining trend. -38.8 10,270 Supply and Demand of Softwood Plywood Domestic Production 3mm & below y/y 2015 OCT 228,699 NOV 232,473 DEC YTD 2,357,056 3-6mm y/y 4.3 - - 8.7 - - -2.0 - - 6-12mm y/y 1,663 -21.2 1,680 -12.8 22,257 0.7 m3; % Shipment Inventory 12mm & over y/y y/y y/y y/y 244,130 10.2 243,394 18.2 134,255 -38.7 124,399 -45.3 28,452 29.2 30,377 23.6 198,584 1.8 200,416 7.0 317,419 19.9 2,017,380 -4.7 2,461,498 7.0 - - The price of all European lumber products (CIF Port Japan) in November was 35,644 yen per c u b i c m e t e r, d o w n by 1.8% from 36,281 yen in the previous (Continued on Page 10) Supply and Demand of Regular Plywood Domestic Production 3mm & below 3-6mm 6-12mm y/y 2015 245,329 OCT 248,152 NOV DEC YTD 2,522,872 y/y y/y y/y Shipment Inventory m3; % Imports Total Supply in Japan 12mm & over y/y 4.0 8.2 1,632 1,564 16.1 15.8 5,388 -21.8 5,750 -13.2 31,719 27.3 33,034 22.2 206,590 207,804 1.9 7.0 -2.1 18,711 19.4 64,284 -15.1 344,020 17.1 2,095,857 -4.4 y/y y/y y/y 259,800 8.9 177,473 -32.4 258,293 16.8 166,589 -38.2 271,899 4.8 233,320 -18.6 2,622,934 6.4 - - 2,680,526 -17.1 y/y 517,228 481,472 4.4 -6.6 5,203,398 -10.5 Japan Lumber Journal Sunday, January 31, 2016 Page 10 month. It was down by 5.7% from the previous year, and local prices continue to be strong. Imports of European Laminated Lumber by Countries unit : cubic meter; % 2015 YTD OCT NOV DEC Y/Y Total FINLAND AUSTRIA ROMANIA ESTONIA others 604,424 223,486 107,547 166,937 52,326 54,128 49,532 17,203 7,500 19,091 2,375 3,363 52,393 24,036 7,084 12,359 4,870 4,044 The price of laminated lumber for the structural use was 49,504 yen per cubic meter, down by 0.1% from 6.0 29.3 -18.5 18.3 -18.6 -29.4 49,550 yen in the previous month. It was also down by 4.5% from the previous year, and Imports of European Lumber by Countries the price was at a unit : cubic meter; % standstill again in Softwood Lumber November. Prices Total SWEDEN FINLAND AUSTRIA ROMANIA LATVIA CZECH others o f l a m i n a t e d 2015 YTD 2,182,496 587,739 750,457 285,226 251,671 100,276 104,860 102,267 lumber for the OCT 171,977 42,071 55,265 27,807 22,306 8,962 9,150 6,416 structural use NOV 221,814 65,036 84,216 32,453 14,957 8,535 8,688 7,929 DEC from all of main Y/Y 44.7 53.8 56.2 108.1 -37.4 110.9 20.9 25.0 countries remain weak. Average Import Value for Major European Commodities unit : Yen per cubic meter (CIF Japan ports); % Softwood Lumber Structural Laminated Lumber All Europe SWEDEN FINLAND AUSTRIA ROMANIA All Europe FINLAND AUSTRIA ROMANIA ESTONIA 2015 OCT 36,281 32,902 32,927 40,491 41,333 49,550 50,487 49,320 48,031 51,046 NOV 35,644 32,948 32,781 40,863 40,349 49,504 50,511 48,673 47,197 50,131 DEC Y/Y -5.7 -9.5 -4.8 2.4 8.0 -4.5 -2.6 -6.1 -7.0 -2.8 Plywood Market 3rd Week January Even after the start of the new year, delivery dates for the domestic softwood plywood have been missed frequently. However, there is no news that the arrival of products after the scheduled delivery dates resulted in the suspension of the on-site operations. It seems that the situation is not that dire. Manufacturers are hoping to manufacture products on a full scale as the inventory volume has been declining. However, with the cold weather hitting Japan now, some of factories fail to increase the production volume as they intend. It will take more time for the supply shortage of softwood plywood to be mitigated. As for the imported plywood, the sales without the cost taken into consideration are made by importers occasionally. The strong yen and the prospects for weaker product prices seem to be the factor. The arrival of the imported softwood plywood in November stayed at 233,000 cubic meters, and the total of the arrival from January through November was not large, standing at 2,681,000 cubic meters or 83% of the previous year’s arrival. Still, due to the sluggish movement of products, the port inventories are slow to be cleared, and trading companies continue to struggle. In Indonesia, the minimum wage for workers was raised this year, and the plywood factories were forced to further increase the cost. There is little possibility that log prices will go down in Malaysia. The import business for the lauan plywood is highly likely to change significantly in 2016. Japan Lumber Journal Sunday, January 31, 2016 Page 11 :Statistics: Russian Timber News The arrival of Russian logs in November were 10,674 cubic meters of larch and 1,317 cubic meters of spruce/fir and 46 cubic meters of hardwood. The demand for larch from plywood and LVL manufacturing factories is strong because of the strong performance of the wood. The arrival of larch has been at the record number of between 10,000 and 20,000 cubic meters for 6 consecutive months. The arrival of spruce/fir in November was the first time in 3 months. As for arrival of lumber products, larch was 2,138 cubic meters, while pine and fir as the major products was 58,925 cubic meters increasing 9.6% from the previous month and 10.8% from the previous year. The arrival of pine and fir has been more than 50,000 cubic meters since the second half of last year and the shortage of high quality logs has been continuing in the domestic market. In November, the arrival of laminated lumber for the structural use was 3,525 cubic meters increasing 37.3% from the previous year but decreasing 29.4% from the previous month. Monthly arrival has been close to reaching 5,000 cubic meters, but the trend was a little relenting in November. As for log prices (CIF Japan Port) in November, larch was 15,766 yen per cubic meter, increasing 2.4% from the previous month and decreasing 14.7% from the previous year. The price of spruce/fir was 16,002 yen per cubic meter increasing 3.5% from the previous year, and that of hardwood (oak) was 147,043 yen per cubic meter. As for prices of lumber products, larch was 28,368 yen per cubic meter, and pine/fir as the major item was 38,517 yen per cubic meter remaining at the same level as the previous month and decreasing 5.1% from the previous year. Small price movement has been continuing with lumber products. The price of laminated lumber for the structural use was 44,530 yen per cubic meter decreasing 0.2% from the previous month and 5.7% from the previous year. The price movement has been small as lumber products. Imports of Russian Wooden Products unit : cubic meter; % Total 2015 YTD OCT NOV DEC Y/Y 141,484 16,359 12,037 59.4 Logs Softwood Hardwood Total Larch Pine Spruce/Fir 110,207 15,975 9,792 5,510 683,766 16,284 0 0 75 54,863 10,674 0 1,317 46 61,424 126.8 - -51.2 -68.5 12.2 Lumber Laminated Lumber Softwood Structural Larch Pine/Fir 46,745 664,319 47,594 639 53,765 4,996 2,138 58,925 3,525 165.9 10.8 37.3 Average Import Value for Major Russian Wooden Products 2015 OCT NOV DEC Y/Y Logs Softwood Hardwood Larch Pine Spruce/Fir 15,391 - 137,600 15,766 16,002 147,043 -14.7 - -3.5 39.3 unit : Yen per cubic meter (CIF Japan Ports); % Lumber Laminated Lumber Softwood Structural Larch Pine/Fir 29,171 38,504 44,605 28,368 38,517 44,530 -13.1 -5.1 -5.7 News in Brief Eco-Products 2015, one of the largest participatory and “hands-on” exhibition featuring environmental technology, products and services in Japan, was held from December 10 to 12 at Tokyo Big Sight. At the event, 702 companies, associations, non-government organizations, non-profit organizations, government bodies, self-governing bodies, universities, and research facilities set up exhibits, and 169,118 people were recorded visiting the exhibition. (Continued on Page 12) Japan Lumber Journal Page 12 Sunday, January 31, 2016 The Japan Federation of WoodIndustry Associations proposed how to use domestic wood material in construction material for housing and exterior use, furniture, and daily products. The Tokyo Plywood Manufacturers Association, Tohoku Plywood Manufacturers Association, and Japan Plywood Manufacturers’ Association also set up exhibits and introduced various plywood products made with domestic wood material. The Wood Design Award 2015 was held for the first time with the awards announcement, presentation, and exhibit taking place at the event. Among 397 products receiving awards, the top award (Minister of Agriculture, Forestry and Fisheries Award) went to Nishiawakura - Mori No Gakko Co., Ltd. Hida Sangyo Co., Ltd. introduced various products made with compressed cedar material. Chairs designed by renowned furniture designers with a beautiful finish were neatly on display, and flooring with an impressive, beautiful grain finish were also exhibited. In the area introducing ecological kitchens, wall and flooring material made from Portuguese cork were used in examples of renovation and remodeling. The Japan LVL Association held its 3rd board of directors meeting for fiscal 2015 on December 18 in Tokyo. A number of representatives from member and supporting member companies nationwide attended the meeting, and after discussion and approval of two items on the agenda, mid-term reports were made by the secretariat concerning various projects being conducted by working groups of the association. Prior to holding the meeting, Ichiro Matsuda, the chairman of the association, said, “5 years ago, the technology group was set up at the association, and while making the working group with the participation of members, efforts were put into the development of new products in the provinces. 10 items were created, and through the design secretariat, they were used in various public projects,” expressing confidence in technological developments that are moving ahead smoothly. He then strongly expressed to the attendees, “The production of LVL is greatly expanding mainly in structural use, and demand for use in housing fixtures is also not bad. The potential in the use for non-housing is also expanding, and LVL can be expected to develop and expand,” and an increase in manufacturers and further progress in technological development are expected. Items on the agenda were: 1) cooperation in the full-scale, 6-story experimental building being conducted mainly by the Japan 2x4 Builders Association and 2) confirmation of the schedule for fire-proof and fire-resistant experiments for fiscal 2016, and both items were approved. On December 17, the Japan Laminated Wood Products Association held an explanatory meeting for the mass media concerning the projects and business of the association in fiscal 2015. Concerning improvements in the quality of laminated lumber, which are the pillar of its activities, the association increased the number of its autonomous strength testing such as Young’s modulus for bending based on JAS standards and bending strength (destructive experiments) of laminated lumber products purchased in the distribution market to 344 examination cases for 49 items from 33 companies in fiscal 2015. The testing included overseas company members and overseas products, and the results of the testing were individually sent to the companies. Projects that contribute to the rationalization of the “marginal burn” (“moeshiro” in Japanese) design method, which is a project of the Ministry of Land, Infrastructure, Transport and Tourism, and projects to examine revisions in the JAS standards were also continued. The amount of domestically manufactured laminated lumber for structural use in 2014 was 1,409,000 m³, and the amount of imports was 728,000 m³. In 2015, the capacity at domestic manufacturing factories was expected to expand, but on the other hand, the amount of imports was expected to decrease slightly and to stall at about 700,000 m³. In 2016, the amount received from European suppliers is expected to increase, and the building of new factories is also scheduled in Japan. Japan Lumber Journal Page 13 Sunday, January 31, 2016 On December 9, the Japan Cross Laminated Timber Association, a general incorporated association, held a tour and meeting concerning an experimental CLT structure under construction at the Building Research Institute, a National Research and Development Agency of Japan, in Tsukuba City, Ibaraki Prefecture. In the experimental structure, 2 rooms were set up for environmental measurements on the 1st floor, and a large living space with a high ceiling was arranged on the 2nd floor. Over 300 people from around Japan came to the event. The experimental structure aims to create a new wood constructed space using the CLT construction method, and the plan is to make use of the characteristics of large 6 x 2.7 meter panels that can be manufactured domestically. Two U-shaped, high ceiling spaces using 6 meter long CLT will be set up, and a large integrated space is being built by merging the two parts together while shifting them little by little. Taking into account the use of CLT for other than housing, large, seamless wood constructed walls and a flat roof using CLT boards are also being used for the testing. Issues such as the standardization of panel sizes, connections and joints using metal fittings, and the use of CLT as it is for the interior will also be examined through the construction of this experimental structure. The designer explained, “I’d like to examine in detail the walking vibration of the floor and sound insulation performance of the floor.” On December 25 in Tokyo, the Institute for Global Environmental Strategies (IGES), a public interest incorporated foundation, held a seminar concerning the 21st session of the Conference of the Parties (COP 21) of the United Nations Framework Convention on Climate Change (UNFCCC), which was held in Paris from November 30 to December 11, 2015. At the seminar, members of IGES who attended COP 21 gave reports about the issues and arguments at the conference after which individuals involved in government and business spoke about their activities and conditions at the conference site. With the awareness of the climate change threatening social stability, the participating countries at the meeting saw the necessity for a wide agreement. The following long term targets were decided: 1) “Holding the increase in the global average temperature to well below 2 °C above pre-industrial levels and to pursue efforts to limit the temperature increase to less than 1.5 °C above pre-industrial levels,” 2) “Increasing the ability to adapt to the adverse impacts of climate change and foster climate resilience and low greenhouse gas emissions development,” and 3) “Making finance flows consistent with a pathway towards low carbon and climate resilient development,” and each country agreed to work to achieve the targets. During the conference, a meeting was also held with the participation of CEO’s from global companies, and efforts to respond to the climate change from the point of view of business were also announced. With a commitment in place, investors have already made a paradigm shift from low carbon to zero carbon. The Tokyo Lumber Wholesalers’ Association held its New Year’s gathering at Mokuzai Kaikan in Shinkiba, Tokyo on January 5. In his greetings speech as the representative of the host, Yoshiaki Kichijo, the chairman of the association, said, “Six and a half years have already passed since the building of Mokuzai Kaikan, and it stands as the form in which the possibilities of wood construction can take shape in cities. I think information about wood constructed facilities to be used for the Olympics and Paralympics has been accumulated. From now on, we will also call for the use of domestic wood in the facilities.” Next in his greetings speech, Satoshi Imai, director-general of the Forestry Agency, encouraged the attendees by saying, “I’d like to give an opportunity for a change to wood construction in cities and change to wood construction in non-housing with the hosting of the Olympics in Tokyo. I’d like everyone to aim at carrying out the ‘wood first society’ mentioned by Chairman Kichijo.” Tsukasa Akimoto and Mito Kakizawa, members of the House of Representatives, also attended as guests and greeted the attendees. Concerning expanding demand for lumber, Akimoto said, “I’ve been (Continued on Page 14) Japan Lumber Journal Sunday, January 31, 2016 Page 14 raising my opinion from the political point of view. The use of lumber is being advocated for the facilities of the new National Stadium, and the use of lumber will be put into practice for public works projects, which people have many opportunities to see with their own eyes.” Kakizawa introduced the plan to use wood construction in building “Maggie’s Tokyo”, a facility for cancer patients to be constructed in the Toyosu area of Tokyo. Hosted by the Tokyo Federation of Plywood Unions, the New Year’s Joint Gathering, the largest New Year’s party of the wood and building materials industry in the Tokyo metropolitan area, was held in grand style on January 7 in Tokyo with over 700 people attending. At the beginning in his greetings speech representing the 7 hosting associations, Atsuhiro Inoue, the chairman of the federation, said, “In hosting the Tokyo Olympics in 2020, we have promised to conserve the global environment. If we don’t use lumber, we will be breaking our public pledge,” in appealing to the attendees to seize this great opportunity to use lumber. Satoshi Imai, director-general of the Forestry Agency, also said, “With the push of the plywood industry, the lumber self-sufficiency rating in 2015 looks like it will go over 30%,” and he continued by saying he will strive to use lumber in the Olympic facilities. An individual from the Tokyo government spoke about the substitution from Southsea plywood to domestic plywood in facilities for the capital, and he introduced cases promoting the use of regional wood. Jointly hosted by the Japan Lumber Importers’ Association, Japan Southsea Lumber Conference, Japan North American Lumber Conference, and Japan Russian Wood Products Conference, four organizations involved in foreign lumber, “2016 Lumber Trading Organization’s New Year’s Gathering” was held in grand style at Royal Park Hotel in Tokyo on January 8 with about 200 people involved in foreign lumber attending. People from the members of the four associations including importing trade firms, major wholesalers, and manufacturers of plywood and laminated wood, the large users, individuals from harbors and piers, individuals from the embassies and associations of lumber exporting countries of America, Canada, Indonesia, and Malaysia, and representatives from the Forestry Agency attended the event. In his greetings speech representing the hosting association, Satoru Yasuda, chairman of the Japan Lumber Importers’ Association, said, “I was appointed to the chairman position in June of last year, and 6 months have passed, but the environment surrounding the imported lumber has not changed for the better. Last year, the amount of imports for both lumber products and plywood decreased, and it was a severe year for the member companies, but for housing and non-housing construction in Japan, imported lumber is absolutely necessary,” and this year, he will put effort into expanding overall lumber demand and into importing lumber that takes the environment into consideration. JLJ Website Address www.jlj.gr.jp Japan Lumber Subscription rates : One year, Japan ¥38,880; Overseas US$400.00 Publisher: JLJ Inc. Office: 25 Sankyo Bldg. #523, 1-48-10 Higashi-Ikebukuro, Toshima-ku, Tokyo 170-0013 JAPAN Phone: +81-3-5950-2251 Fax: +81-3-5950-2271 Email [email protected] Website http://www.jlj.gr.jp/ Journal
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