International Tropical
Timber Organization
INTERNATIONAL ORGANIZATIONS
CENTER,5TH FLOOR,
PACIFICO-YOKOHAMA1-1-1,
MINATO-MIRAI, NISHI-KU,
YOKOHAMA, 220 JAPAN
F A C S I M I L E
++81-45-223-1121
Tropical Timber Market Report
16 - 31st August 1998
Contents
International Log Prices p1
Domestic Log Prices p2
International Sawnwood Prices p3
Domestic Sawnwood Prices p4
International Ply and Veneer Prices p5
Domestic Ply and Veneer Prices p6
Other Panel Product Prices p7
Prices of Added Value Products p7
Rubberwood and Furniture Prices p8
Report From Japan p9
Report From Korea p11
Report From China p13
Report from North America p15
World Value of the US Dollar p18
Abbreviations p18
ITTO Fellowship Grants p19
International Tropical Log Prices
Sarawak Log Prices
FOB per Cu.m
Meranti SQ up US$120-125
small US$90-95
super small US$60-65
Keruing SQ up US$120-130
small US$90-100
super small US$70-75
Kapur SQ up US$110-120
Selangan Batu SQ up US$125-135
The depressed international market has badly affected the Sarawak timber industry a hard knock. According to the latest trade statistics for the first six months of the year, export earnings from log exports dropped from RM1.05 billion (first six months of 1997) to RM844 million in 1998. This is due to the dual effects of a fall both volume and values terms. Overall, for the first six months export revenues from the timber sector dropped to RM2.39 billion from RM2.76 billion last year.
Solomon Islands
Forestry Department Indicative FOB Prices and SIFIA's forecast price trend
Forestry Department SIFIA
Indicative Price Forecast
per Cu.m Movement
Group 1A
Kwila US$120 no change
Group 1B
Palaquium US$ 95 no change
Planchonella '' no change
Calophyllum '' no change
Pometia '' no change
Gonostylus no change
Schizomeria '' no change
Group 2
Canarium US$ 80 no change
Burckella '' no change
Terminalia '' no change
Group 3
Dillenia US$ 75-80 no change
Celtis US$ 75-80 no change
Alstonia '' no change
Dysoxylum '' no change
Eugenia '' no change
Endospermum '' no change
Vitex US$120 no change
Amoora US$90 no change
Group 4
Campnospermum US$75-80 no change
Parinari US$70 no change
Marathes '' no change
Mixed white '' no change
Mixed red '' no change
Low Grade Logs US$70 no change
Cameroon Log Prices
FOB per Cu.m
N'Gollon 70cm+ LM-CFFR 1350
Ayous 80cm+LM-CFFR 1000
Sapele 80cm+LM-CFFR 1650
Iroko 70cm+LM-CFFR 1650
Myanmar
Latest available prices.
Logs per Hoppus ton FOB
Logs per Hoppus ton FOB
Teak June July
3rd Grade US$3075 US$3289
4th Grade US$2978 US$2958
SG-1 Grade US$2371 US$2122
SG-2 Grade US$1602 US$1648
SG-3 Grade - -
SG-4 Grade US$956 US$958
Padauk
3rd Grade - -
4th Grade US$805 -
Assorted -
Pyinkado US$209 US$201
Gurjan US$174 US$168
Thingan - -
Yamane - -
Hnaw - US$287
Ingyin - -
Sagawa - US$259
Thit Kar US$215 -
Myauk Ngo - US$150
Thinwin US$499 -
Hoppus ton equivalent to 1.8 Cu.m. Teak 3-4th Grade for sliced veneer. Teak grade 1-4 for sawmilling. SG Grade 3 3ft - 4ft 11" girth, other grades 5ft girth minimum.
Papua New Guinea
FOB per Cu.m
Group 1
Taun US$ 70-73
Calophyllum US$71-75
Group 2
Amoora, Hopea US$50-55
Group 3
Celtis, Watergum US$47-50
Group 4
Mixed Reds/Whites US$40-45
Indonesia
The Directorate General of International Trade of the Ministry of Trade and Industry has set the FOB selling prices for a number of species for the collection of export in relation to log exports for the period July 22 to 30 September 1998. The prices for duty calculation per Cu.m are as follows : Meranti USD100, Cendana USD2,300, Teak USD700, Rubberwood USD70.
Domestic Log Prices
Brazil
Some movement has been seen in the domestic market and prices have stabilised. An upturn in the market was expected as demand normally increases in the second half of the year.
Logs at mill yard per Cu.m
Mahogany Ist Grade US$340
Ipe US$68
Jatoba US$44
Guaruba US$35
Mescla(white virola) US$42
Indonesia
Domestic log prices per Cu.m
Plywood logs
Face Logs US$60-65
Core logs US$35-40
Sawlogs (Merantis') US$50-60
Falkata logs US$40-45
Rubberwood US$26-28
Pine US$45-55
Mahoni US$330-350
Malaysia
Logs
Domestic (SQ ex-log yard)
per Cu.m
DR Meranti US$125-125
Balau US$115-120
Merbau US$130-135
Peeler Core logs US$58-63
Rubberwood US$23-23
Keruing US$120-125
Peru
Domestic Log Prices Pucallpa
per Cu.m
Caoba
(Swietenia macrophylla) US$225
Capirona
(Calycophylum spruceanum) US$34
Catahua (Hura crepitans) US$15
Cedro (Cedrela odorata) US$75
Estoraque
(Miroxilon balsamun) US$41
Huayruro (Ormosia sp) US$45
Tornillo
(Cedrelinga catenaeformis) US$45
Ghana
Sawmillers and ply-veneer producers are contemplating importing Okoume logs rom Gabon. Reports suggest that negotiations for the purchase of 7,000 Cu.m are in progress.
International Sawnwood Prices
Brazil
Exports continue to be slow. Last data confirms that this year exports of wood products will be at least 30% lower than in 1997. Exports of tropical timber products to Asia are practically zero.
Most of the low cost sawnwood (LKS) that used to be exported to Philippines and Thailand are continuing to flow for the domestic market. This lumber is used for construction and other uses with low quality requirement.
Export Sawnwood per Cu.m
Mahogany KD FAS FOB
UK market US$990
Jatoba Green (dressed) US$460
Asian Market
Guaruba no business
Angelim pedra no business
Mandioqueira no business
Pine (AD) US$145
Peru
Export Sawnwood FOBCallao/Lima
per Cu.m
Caoba (Mahogany) US$849
Cedro (Red Cedar) US$477
Cumala (Virola) US$186
Ghana
End June statistics indicate that some 55,500 Cu.m of sawnwood comprising 32 species were exported at a value of US$ 21.4 mil. 25 importing countries were represented. Germany, USA, Ireland, Saudi Arabia, Italy, Holland, UK and France were the leading importers. The US imported a total of US$3.58 mil..
Export prices continue to be pressured downwards and falls of 4-7% have been reported by exporters in the last 2 months.
Rough Sawn Prices FOB
Niangon for France per Cu.m
25 x 100 mm
32 x 100 mm
Lengths 1.5m - 4.0m DM730
Afzelia per Cum
31 x 81mm and 105mm
AD DM840
KD DM960
Wawa Boules, FOB
For Germany, France,UK and Italy
Thicknesss 16-100mm
Width 100mm and up
Length 1.8m&up mostly 3-4m
per Cu.m
Air Dry DM310-350
Kiln Dry DM390-500
Wawa Square Edged AD Lumber
Squares 23x23mm up to 75x75mm
Boards 100mm & up
width 0.9m & up DM300-505
Wawa Square Edged KD Lumber
range DM400-600
Plantation Teak
Flooring Specs for
Hong Kong and MacauUS$630-700
Garden Furniture blanks
for UK US$900-1200
Malaysia
Sawn Timber
Export(FOB) per Cu.m
Dark Red Meranti (2.5ins x 6ins & up)
GMS select & better (KD)US$435-440
Seraya
Scantlings (75x125 KD) US$540-550-
Sepetir Boards US$180-185-
Perupok (25mm&37mm KD)
US$680-690-
K.Semangkok
(25mm&37mmKD) US$690-700
Taiwan Province Imports
Rubberwood per Cu.m
25mm boards US$230-235
50-75mm squares US$280-290
75-100mm squares US$340-350
Sepetir
GMS (AD) US$190-200
Ramin less than 2 ft. US$500-520
greater than 2 ft. US$610-620
Oak 25mm boards US$840-850
Maple US$1400-1500
Cherry US$1400-1500
Domestic Sawnwood Prices
Brazil
Tropical sawn timber is facing growing competition from eucalyptus produced in southern and central Brazil. In some market niches substitution of tropical sawnwood by eucalyptus is quite significant. This is mainly the case with low grade sawnwood used in construction and the packaging industry.
Sawnwood (Green ex-mill)
Northern Mills per Cu.m
Mahogany US$710
Ipe US$390
Jatoba US$320
Southern Mills
Eucalyptus AD US$150
Pine (KD) First Grade US$135
Peru
Caoba per Cu.m
(Swietenia macrophylla) US$564
Capirona
(Calycophylum spruceanum) US$101
Catahua (Hura crepitans) US$59
Cedro (Cedrela odorata) US$319
Huayruro (Ormosia sp) US$145
Shihuahuaco (Dipterex sp) US$130
Tornillo
(Cedrelinga catenaeformis) US$174
Copaiba (Copaifera) US$116
Ghana
Dahoma, Chenchen, Antiaris
per Cu.m
Mill Run 50x150mm US$95-125
50x100mm US$72-105
50x50mm US$105-150
25x300mm US$72-105
Mixed Redwood
40x300x3.6m US$105-240
Indonesia
Sawn timber
Domestic construction material
Kampar per Cu.m
AD 6x12-15x400cm US$220-230
KD US$310-330
AD 3x20x400cm US$310-320
KD US$390-400
Keruing
AD 6x12-15cmx400 US$190-200
AD 2x20cmx400 US$200-210
AD 3x30cmx400 US$220-230
Malaysia
Sawnwood per Cu.m
Balau(25&50mm,100mm+)
US$160-165
Kempas50mm by
(75,100&125mm) US$110-120
Red Meranti
(22,25&30mm by180+mm)
US$200-210
Rubberwood
25mm & 50mm Boards US$150-155
50mm squares US$190-200
75mm+ US$210-215
Myanmar
per ton (1.4Cu.m)
Sawn 6 ft. and up length
Teak Kyat 70,000
Pyinkado Kyat 60,000
Padauk Kyat 60,000
Gurjan Kyat 35,000
Mixed Species Kyat 25,000
International Plywood and Veneers Prices
Indonesia
Plywood (export, FOB)
MR, per Cu.m
Grade BB/CC
2.7mm US$270-280
3mm US$240-255
6mm US$200-210
Ghana
Rotary Cut Veneer FOB
per Cu.m
Face Veneer 1-1.6mm
Ceiba US$245
Koto 30% jointed allowed
US$510-520
Plywood 1220 x 2440mm Grade c/c WBP FOB Ceiba for the German market
per Cu.m
4mm DM735
6mm DM623
9mm DM613
12mm DM600
15mm DM587
18mm DM573
Brazilian Plywood and Veneer
Veneer FOB per Cu.m
White Virola Face
2.5mm US$200-260
Pine Veneer (C/D) US$165-185
Mahogany Veneer per Sq.m
0.7mm US$2.50
Plywood FOB per Cu.m
White Virola (US Market)
5.2mm OV2 (MR) US$280
15mm BB/CC (MR) US$260
For Caribbean countries
White Virola 4mm US$360
9mm US$300
Pine USA market
9mm C/CC (WBP) US$240
15mm C/CC (WBP) US$230
Malaysian Plywood
MR Grade BB/CC FOB
per Cu.m
2.7mm US$280-285
3mm US$250-255
3.6mm US$210-220
9-18mm US$180-190
Domestic plywood
3.6mm US$205-210
9-18mm US$200-210
Myanmar
Hardwood plywood, FOB.
1220-1250x2440-2500 US$ per Cu.m
3.7mm BB/CC 266
Utility 255
5.5mm BB/CC 252
Utility 240
9mm BB/CC 230
Utility 220
12mm BB/CC 266
Utility 216
15mm BB/CC 226
Utility 216
18mm BB/CC 215
Utility 205
900-1220x1800-2400
9mm BB/CC 225
Utility 215
12mm BB/CC 221
Utility 211
18mm BB/CC 203
Utility 193
Domestic Plywood Prices
Brazil
Plywood demand is recovering, but is still very slow. Domestic consumption for the year will be lower than in 1997. The main reasons are associated with substitution by MDF and particleboard. Prices of these panels have drooped in the market and producers have been very aggressive in promoting their material
Rotary Cut Veneer
(ex-mill Northern Mill) per Cu.m
White Virola Face US$150
White Virola Core US$118
Plywood
(ex-mill Southern Mill)
Grade MR per Cu.m
4mm White Virola US$510
15mm White Virola US$360
4mm Mahogany 1 face US$1,080
Indonesia
Domestic MR plywood
(Jarkarta) per Cu.m
9mm US$220-235
12mm US$205-215
15mm US$190-200
18mm US$175-185
Other Panel Product Prices
Brazil
MASISA, a large producer of wood panels in Chile has announced a new particleboard and MDF plant in Brazil. The plant is to be located in Parana State. MASISA also has a MDF and particleboard plant in Argentina. This plant exports most of the production to Brazil.
Apparently the strategy is to let the existing plant in Argentina cover the Argentinean and Uruguayan markets, with the new plant supplying Brazil. This seems to be logical as the company is losing competitiveness by having to transport panels for relatively long distances. If all new plants announced proceed (Placas, Satipel, Masisa, Duratex, and others) the production of reconstituted wood panels, (including MDF, particleboard and OSB), will be over 2.5 mil. Cu.m by the year 2002.
Export Prices
Blockboard 18mm per Cu.m
White Virola Faced
B/C US$230
Domestic Prices
Ex-mill Southern Region per Cu.m
Blockboard
15mm White Virola Faced US$390
15mm Mahogany Faced US$810
Particleboard
15mm US$230
Indonesia
Other Panels per Cu.m
Export Particleboard FOB
9-18mm US$75-90
Domestic Particleboard
9mm US$130
12-15mm US$115
18mm US$100
MDF Export (FOB)
12-18mm US$115-125
MDF Domestic 12-18mmUS$170 -180
Taiwan Province of China, Imports
MDF per Cu.m
Domestic Prices
3mm thick US$220-230
16-18mm x 4' x 8' US$175-185
Particleboard per Cu.m
12-18mm (4x8) US$130-135
Malaysia
Particleboard (FOB)
per Cu.m
6mm & above US$100-105
Domestic
6mm & above US$120-125
MDF (FOB) per Cu.m
Less than5mm US$160-165
Greater than 6mm US$120-130
Domestic Price US$150-160
Prices of Added Value Products
Indonesia
Mouldings
Ramin casings per Cu.m
(for the Italian market) US$680-700
Laminated Scantlings US$350-360
Laminated Boards
Falkata wood US$260-270
Red Meranti Mouldings
11x68/92mm x 7ft up
Grade A US$570-590
Grade B US$450-460
Malaysia
Mouldings (FOB) per Cu.m
Selagan Batu Decking US$530-540
Laminated Scantlings
72mmx86mm US$480-500
Red Meranti Mouldings
11x68/92mm x 7ft up
Grade A US$620-630
Grade B US$500
Ghana
Wawa
10mmx23mmx2.16m - 2.45m per Cu.m
some black spots allowed DM 900
Finger jointed mouldings DM 850
With 30% Filled holes DM 550
5mmx24mmx2.43m DM1200
Dahoma
Blanks KD 20% No defects
25mmx90mmx510, 533, 1000, 1273
1800 Stg505
Albizzia Blanks
25mmx90mmx510, 533, 1000, 1273
1800 Stg505
Odum Blanks
KD 14% PAR
25,28x66, 90x674,728,762 Stg660-780
(for the Irish market)
Furniture and Rubberwood Parts
Malaysia
The Malaysian furniture Industries, despite the current economy crisis, performed well during the first six months of 1998. According to data just released, export earnings in the furniture sector reached some RM1.97 billion for the first half of this year compared to RM1.44 billion in the corresponding period last year. The industry is confident that the industry will hit the RM4.0 billion in export earnings for the 1998 calendar year.
per Cu.m
Finger jointed
laminated boards US$525-535
top grade US$600-610
Dining table
Solid rubberwood laminated top 3' x 5'
with extension leaf US$28-30ea
Same with
Oak veneered MDF US$43-46ea
Windsor Chair US$8.0-8.5ea
Colonial Chair US$10.0-11.0ea
Queen Anne Chair (with soft seat)
without arm US$16-16.5ea
with arm US$21-23ea
Brazil
Edge Glued Pine Panel
per Cu.m
for Korea 1st Grade no business
Last price US$570
US Market US$490
Taiwan Province of China
The export of wooden furniture, particularly panel- based products such as dining suites overlaid with veneers, buffet and hutch and some high end chairs has increased significantly over the last few weeks. It has been reported that orders for the range of these products, traditionally coming from China, have been flowing back to Taiwan Province of China.
Manufacturers in Taiwan P.o.C have suddenly found themselves in a competitive position as, over the last few months, the NT$ has depreciated significantly. Since the beginning of this year the NT$ has depreciated from 28NT$ per US dollar to the current rate of around 34.5 NT$ per US dollar, which represented a 23% depreciation of the currency.
The yuan remains very stable and this has resulted in products from China becoming progressively less competitive on the export market.
Furniture
Dining suite (FOB)
Oak Veneered MDF tables and
chairs (6 per set) 4ft dia.
US$115-125per set
Occasional table Cherry veneer
top 2ftx4ft US$20-25ea
Currency Crisis
The financial crisis that has hit economies from Brazil to Beijing is intensifying into one of the world's worst and one of the most baffling crisis in recent history. Investors and savers world-wide are rushing to exchange local currencies for US dollars, one of the last "safe havens" left. In selling domestic currencies stock values are falling and interest rates are rising.
What makes the current crisis so worrying is that there is no clear signs of and end in sight. Hopes for a quick recovery have faded and a new round of devaluations is fuelling pessimism as the rouble, Mexican peso, Venezuelan bolivar and Canadian dollar have all fallen. Plunging commodity prices continue to fuel the risks of further devaluations.
Report From Japan
The economic crisis in Japan continues to deepen and there are no signs of a turn-around. Official figures, recently released, paint a bleak picture of the economy. The government's focus is on economic recovery and two major policy options are being tabled. First the government has submitted bills to the Diet to clean up the bank's bad-loan situation and to restructure the banking system. Secondly the government is introducing fiscal measures to increase public works spending and to implement permanent tax cuts. There is considerable debate over the proposals to use public funds to resolve the banking sector weaknesses. Technical details aside, the greatest problem may be in restoring confidence and credibility to the markets.
Housing Starts
June starts were 106,715 units, representing 16 months consecutive decline. Wooden housing units decreased by 5% to 50,025. The number of starts for the first six months of this year is down 14.4% compared to the same period last year.
Plywood Production Down
The production of plywood for the first half of this year was 1,706,000 Cu.m, 28% less than the same period of last year. June production was 306,000 Cu.m, 16% less than June last year and represents a decline for nine consecutive months. Consumption was 265,000 Cu.m, down 23% . Plywood supply, for the first half including imports, was 3,683,000 Cu.m, down 33% from a year ago.
SE Asian Logs
The Japanese log market remains stagnant. Log export prices in Sarawak and PNG continue to be on high side without much logs available because of monsoon weather, this has forced some importers to shift to Sabah to acquire logs.
Current FOB prices for regular Meranti in Sarawak is firming to US$110-115 per Cu.m with small logs at US$93-95. It is reported that Super Small logs are not readily available at present. PNG's taun and calophylum are offered with US$90-95.
July log arrivals were about 270,000 Cu.m, about half of the level a year ago. The log market in Japan is resisting suppliers' FOB price increases. Meranti Regular with 20% small mixed is barely reaching 5,500 yen CIF per koku although importers are paying about 6,000 yen. Importers are now asking 5,600-5,800 yen. Small Meranti and PNG's taun/calophylum are priced about 4,500-4,600 yen/koku.
Plywood Prices
The Plywood market is deteriorating due to bleak demand. Plywood mills and importers are unable to recover their costs in this declining market despite production and import cuts. Inventories are being adjusted but still supply is running ahead of demand. In the Tokyo market 12mm concrete formboard, which is a market indicator, is quoted 760-80 yen per sheet for Indonesian import, 60-70 yen lower then July and 800 yen for domestic boards, 70-80 yen lower than July.
The domestic softwood plywood market is fairing much worse than the tropical hardwood plywood market because demand from home builders, the main users of softwood plywood, is extremely sluggish. In the market, imported plywood is available at same price as softwood and hardwood plywood is capturing the orders. The current market price for softwood plywood is 650 yen for structural panel and 600 yen for non JAS underlays, both 100 yen lower than July.
Medium thickness plywood such as 3.6mm Indonesian panels are at 340-350 yen per sheet, domestic 4mm is 420-430 yen, Indonesian 5.2mm is 450-460 yen, domestic 5.5mm is 530-540 yen. Prices for thin plywood are weak around 260-270 yen for both imported and domestic products.
Increasing bankruptcies
The total number of bankruptcies in July was 1,673, making this the worst July for 50 years. Out of the total number of bankruptcies in July, 81 were in the timber industry. This is the second highest monthly failure since December.
Log, Lumber and Panel Prices
Logs For Plywood Manufacturing
CIF Price Yen per Koku
Meranti (Hill, Sarawak)
Medium Mixed 5400
Meranti (Hill, Sarawak)
STD Mixed 5,500
Meranti (Hill, Sarawak)
Small Lot
(SM60%, SSM40%) 4,500
Taun, Calophyllum (PNG)
and others 4,500
Mix Light Hardwood
(PNG G3-G5 grade) 3,700
Okume (Gabonese) 6,500
Keruing (Sarawak)
Medium MQ & up 7,500
Kapur (Sarawak) Medium
MQ & up 5,800
Logs For Sawmilling
FOB Price Yen per Koku
Melapi (Sarawak)
Select 9,000
Agathis (Sarawak)
Select 8,000
Lumber FOB Price Yen per Cu.m
White Seraya (Sabah)
24x150mm, 4m 1st grade 170,000
Mixed Seraya 24x48mm,
1.8 - 4m, S2S 38,000
Red Oak 5/4x6 ins and wider
FAS (US East Coast) 125,000
August Wholesale Prices
Report from Korea
General
The sluggish signs in the economic situation have been accelerating and spreading to all sectors. Industrial output in May represented a 10.5 percent fall year on year but in June turned out to be 13.3 percent down which was the largest drop since 1952, when the National Statistic Office was launched.
Total exports in July, which seem the only viable means of turning the Korean economy around were also down 13.7 percent compared to last year, this is the biggest fall since January, 1985.
Furniture and other related manufacturing sectors saw their production fall by 39 percent, timber and wooden product production fell 38.8 percent in the first half. The jobless rate in July was 7.6 percent, the highest record since 1966 and nearly three times the same month last year. The number of the unemployed has reached 1,651,000. This figure represents an increase of nearly one million people from 658,000 unemployed in December, 1997.
Default rates on corporate promissory notes took a sharp upturn in July which was 0.69 percent, which was only second to the 0.83 percent recorded in February.
DRI, the research arm of Standard & Poor's Rating Group in America has forecast Korea's economic growth in 1998 as minus 6.7 percent.
Construction
The construction market has shrunk to the lowest level in past 10 years. Construction orders for housing in the first half of the year stood at 2,666,549 sq.m, which was only 48.95% of the record set last year (5,446,942 sq.m). Orders in the Non-Housing sector stood at 1,504,029 sq.m, which was down to 31% of the same period in 1997.
Many economists say it is impossible to predict when market will hit bottom.
Log market
The final figures for imported hardwood round logs in the first half of the year was 380,324 Cu.m. imported softwood logs stood at 1,560,478 Cu.m. The total volume softwoods and hardwoods reached only 54 percent of the record period record in 1997 and it is expected that total volume of round logs import in 1998 will be less than half of last year's imports.
When the year started, analysts estimated total imports of round logs for the year at about 7,652,000 Cu.m but the final count turned out at only 25% of that in the first half of the year, which is the lowest recorded since 1971. There are no signs of a market recovery in near future and no signs of prices improving.
The main supply countries, Sarawak and Papua New Guinea have decreased their supply due to bad weather and Solomon Islands has just started production again after suspending logging last November, however production not in full swing and prices offered are not meeting producer expectations. Furthermore, the limited number of buyers in the market want high grades of selective species, especially the low price species which are suitable for the basic production needs. For this reason, Meranti from Sarawak is not imported and the buyers are looking for Low Grade logs from Papua New Guinea or Solomon Islands at prices of only US$80-100 per Cu.m C&F.
Even though there is very limited demand from small fishing boat manufacturers, good quality Dillenia from Solomon Islands is one species in short supply because the major Solomon suppliers had stopped operation and stocks are at low levels.
Domestic wholesale prices
per Cu.m
Sarawak Meranti regular W333,000
Solomon Taun regular W233,100
Solomon Taun Low grade W149,850
Solomon Dillenia regular W233,100
Solomon Dillenia Low gradeW173,160
Low grade Calophylum W183,150
NZ Radiata 11m W139,860
Plywood and Other Panels
Plywood production in July was 51,503 Cu.m, which was up slightly from the 49,735 Cu.m in June achieved by production for export but this is only around 60 % of production capacity compared to operation of the last year. Particleboards production in July was 33,318 Cu.m a drop from 34,602 M3 in June, and continues the fall since last December, 1997. MDF production was 39,432 Cu.m in July, a slight increase from 34,156 Cu.m in June, but the producers are still operating at less than 60% capacity.
Plywood sales in July recorded another drop to 39,517 Cu.m from 41,916 Cu.m in June and Particleboard sales were 38,991 Cu.m in July down from 40,249 Cu.m in June. MDF sales stood at 39,873 Cu.m in July which was a slight increase on the previous month sales of 30,196 Cu.m. The domestic market for the various panels seems still not to have hit bottom.
Exports in July were maintained at the same level as in June. Plywood exports in July were recorded at 12,133 Cu.m, and MDF exports were almost the same volume as June's exports.
Stock of plywood at the end of July were not much changed from end of June and
stood at 81,152 Cu.m. Stocks of Particleboard reached 24,425 Cu.m and MDF stocks stood at 63,823 Cu.m at the end of July. Stocks of these two panels have been falling.
Prices trends in July reflect the weak market and several big wholesalers holding high stocks are facing serious financial difficulty.
Price of Panels: ex factory per piece
Combi-Plywood
12mm x 4'x8' T-1 W14,500
12mm x 3'x6' T-1 W 8,500
12mm x 4'x8' T-2 W13,000
12mm x 3'x6' T-2 W 7,500
Tego Plywood
12mm x 4'x8' Tego W23,000
12mm x 3'x6' Tego W12,500
Particle Board
12mm x 4'x8' W6,900
15mm x 4'x8' W7,300
18mm x 4'x8' W8,900
Sawnwood
per cu.m
Meranti S4S 40mm W540,000
Meranti
Rough Sawn 45mm W480,000
Report From China
China refunded some yuan 21 billion in export taxes during the period January to July, this is up almost 10% from a year ago. Export tax rebates in July rose to yuan 4.3 billion an increase of 34% on a year earlier. China is maintaining its pledge not to devalue its currency to increase export competitiveness, other measures, such as raising export tax rebates may be just as effective. China's exporters receive a rebate of about 9% on the 17% value added tax they pay, but authorities recently raised the amount for sectors hit most badly by the competition from SE Asian exporters.
Recently, Shanghai hosted the US Hardwood Sales Committee annual meeting, the first in Southeast Asia. The Hardwood Sale Committee of the US is paying more and more attention to growing market opportunities in China. Shanghai, the largest city in China, with its high potential market was specifically chosen for this first meeting.
The purpose of the meeting was to promote the technical properties of US hardwoods to try and capture a greater share of the market in China, especially in Shanghai. More than 200 participants from the timber industry, furniture sector, construction industry, as well as designers and interior decorators attended. It is projected that the current export value of US hardwood to China has totalled around US$96 million and this is expected to increase annually.
Shanghai yuan per Cu.m
Radiate pine log
length:6m, dia. 26cm+ 900
Douglas fir log 28cm 1300
Lauan lumber ( mixed) 1650
White oak lumber 2 ins 11000
Canadian sawlog 4m+ 1500
US maple lumber 2 ins 11000
Teak sawlog 4 m+g 8000
SE Asian Sawlog 2500
Beijing yuan per Cu.m
Lauan log ( mixed) 2450
Teak sawlog 4m+ 9500
Qindau
Luan Log (mixed) 1200
White oak lumber
2 inches thick 9000
Keruing log 900
Nanjing
Douglas fir log 1450
Lauan log 1800
Teak sawlog 4 m+ 9000
Sawlog from SE Asia 3200
American maple lumber
2 inches 11,000
Hangzhou
Douglas Fir sawlog length:
more than 4m 1600
Lauan log 1450
Keruing log 1500
Canadian sawlog 4m+ 1250
Teak sawlog 4m+ 8500
SE Asian Sawlog 3700
Guanzhou
Lauan Log 1300
Keruing log 1800
White oak 2 ins sawnwood 9000
Canadian sawnlog
length: 4m+ 2300
US maple Lumber 2 ins 12000
Teak sawlog 4 m+ 6500
Sawlog from SE Asia 3000
Hong Kong CIF
per Cu.ft
Sarawak Logs mixed 54"-71" HK$16
Meranti Sawnwood SabahHK$43-46
per Sq.ft
Taiwanese Ply 2.7mm HK$1.6
Taiwanese Ply 3mm HK$1.7
Malaysian Ply 12mm HK$2.8-3.0
Malaysian Ply 18mm HK$3.6-4.0
South Korean Ply 12mmHK$2.7-3.0
South Korean Ply 18mmHK$3.8-4.0
Philippine Ply 12mm HK$2.7-3.0
Philippine Ply 18mm HK$3.7-4.1
Wholesale Prices Indonesian and Malaysian
plywood 3mm 1220x2440
yuan per sheet
Beijing 35
Shanghai 27.5
Harbin 40
Shenyan 28
Zhengzhou 29.5
Lanzhou 36
Shijiaozhuang 35
Yingchuan 35
Xian 30
Jinan 38
Hefei 37
Qindau 40
Chongqing 26
Chengdu 26
Nanjing 29
Hangzhou 30
Wuhan 26
Changsha 31.5
Guanzhou 25
Sawnwood Prices in the UK
FOB plus Commission per Cu.m
Teak 1st Quality 1"x8"x8' Stg2650
Brazilian Mahogany
FAS 25mm Stg694
Tulipwood FAS 25mm Stg245
Cedro FAS 25mm Stg408
DR Meranti Sel/Btr 25mm Stg260
Keruing Std/Btr 25mm Stg205
Sapele FAS 25mm Stg310
Iroko FAS 25mm Stg355
Khaya FAS 25mm Stg330
Utile FAS 25mm Stg395
Wawa No1. C&S 25mm Stg190
Plywood and MDF in the UK
CIF per Cu.m
Brazilian WBP BB/CC 6mm US$450
" Mahogany 6mm US$1290
Indonesian WBP 6mm US$350
Eire, MDF BS1142 per 10 Sq.m
12mm Stg33.50
Manufactured Items
CIF Wholesale
Carolina Door US$25.50 Stg34
Directors ChairUS$9.00 Stg9.00
8" Salad bowl Stg2.00 Stg5.00
From Europe
The "Forest products annual market review, 1997-1998", one of six annual issues of the "UN-ECE and FAO Timber Bulletin" is available for the first time on the ECE Timber Committee's website at: http://www.unece.org/trade/timber
The "Review" contains 2 special chapters on the "Certified forest products marketplace" and the "Effects of the Asian crisis on ECE region forest products markets" as well as the traditional coverage of the markets for roundwood, sawnwood, panels and pulp and paper. The ECE (Economic Commission for Europe) region covers Europe, North America and the Commonwealth of Independent States.
The "Review" is published and will be available in English, French and Russian by contacting: info.timber@unece.org
Report from North America
Oak in the Secondary Wood Products Industry
Oak can be divided into two distinct wood categories, Red Oak and White Oak. Red Oak is such a commonly used wood in the United States and Canada that it could almost be described as ubiquitous. It is frequently referred to as American Red Oak.
The combined share of Red and White Oak in the American furniture industry increased from approximately 5 percent prior to 1970 to 30 percent in 1990 from where it has declined to just under 20 percent at the present time. (The percentages are based on the number of bedroom and dining room sets exhibited at the October furniture market in High Point, NC, USA).
Share of Red and White Oak used in the American Furniture Industry
Description of Species
Red Oak is found throughout the eastern United States, especially in the Appalachians, Ohio, and Kentucky. The average height of the trees is about 25 meters and the stem grows to a diameter of about one meter. The average weight of the wood is 780 kg/m3.
Species of Red Oak include northern Red Oak (Quercus rubra); southern Red Oak and Spanish Red Oak (Quercus falcata); swamp Red Oak and Cherrybark Oak (Quercus falcata, variation pagodaefolia); and Shumard Red Oak (Quercus shumardii). Some species of the Fagaceae family are also often referred to as Red Oak.
Characteristics and Working Properties
Red Oak dries slowly and has a tendency to split, check and honeycomb so care is needed in air and kiln drying. The heartwood is non-durable and should not be used for exterior uses. Oak is not a toxic wood, but it can emit a pungent smell that some woodworkers find obnoxious due to the high tannin content. Tannin in the bark of oak is used to tan leather.
The growing site affects the properties of the wood. Generally, oaks from northern climates are tighter-grained and denser than woods growing in the warmer southern climates where wood grows faster. Southern Red Oak is harder, heavier and more course in texture.
Red Oak has a distinctive red colouration, coarse texture and large open pores. In comparison to White Oak, Red Oak has smaller rays. The wood finishes very well. Due to its large pores, oak takes a great variety of fine filled or textured finishes. Red Oak can be stained easily for attractive looks. However, since the early wood is quite porous, it may take more stain than the harder summerwood. Pore filler may be helpful in obtaining a smooth finish. Red and White Oak look very similar when finished.
Uses
Red Oak has consistently been named among the most popular woods at the High Point Furniture Market each spring and fall
Red and White Oak are frequently used for Country Furniture, Arts & Crafts and Prairie styles. Quarter sawn and rift cut White Oak lumber is a favored raw material for Mission Oak Furniture because of the colour and medullar rays. Red Oak is a popular choice for kitchen and bath cabinets, contract furniture, tables, bedroom and dining room furniture, and occasional pieces of all kinds.
Lower grade Red Oak is also a popular flooring material because it is heavy, hard and stiff and has high shock resistance. Other popular uses for Red Oak include; doors, mouldings, architectural millwork, interior joinery, plywood, decorative veneers, wall paneling, boxes, crates, caskets and coffins, agricultural implements, and woodenware.
White Oak and European Oaks are frequently used for boat and shipbuilding. These woods are ideal for items which require a natural durability. Also, White Oak is considered more resistant to decay. Red Oak is less suitable for tight cooperage since the wood is extremely porous and not water-resistant. However, because Red Oak wood is more permeable, it is easy to apply preservative treatments.
Prices and Price Movements
Prices of Oak vary significantly by growing region, species and quality grades, as shown in the following table. It is interesting to note that Red Oak prices are highest in the Northern growing regions, whereas White Oak is most expensive in the Appalachian region. Regional price differences for top quality Red Oak may be in excess of 20 percent.
Red Oak US$ per 1000 Board Foot
Top Quality KD Green
Northern 1608 1290
Appalacian 1488 1165
South 1333 1025
No2 Common
Northern 893 660
Appalacian 840 600
South 770 585
White Oak
Top Quality
Northern 1330 945
Appalacian 1393 1018
South 1215 920
No2 Common
Northern 570 330
Appalacian 598 435
South 573 435
Note: All prices are ex-mill averages as of August 1998 and refer to 1000 board feet, 1-inch thick.
The price development during the past 20 months differed substantially depending upon the species, growing regions, lumber quality, and drying stage. Generally prices advanced at an above average pace in the case of (1) Red Oak, (2) lower quality grades, (3) green lumber, and (4) wood from the Southern region. For instance, Southern Red Oak of No.2 Common quality is now 30 percent more expensive than 20 months ago.
On the other hand, prices for White Oak, above all the upper quality grades, suffered price declines between January of 1997 and now.
The price index for a few selected lumber products is shown below.
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