Sarawak plywood prices likely to firm up again

KUCHING: Sarawak's plywood prices are expected to firm up again as
Japanese importers have resumed buying for reconstruction activities
after March's devastating earthquake and tsunami.
Sarawak Timber Association panel products' committee chairman Wong Kai Song
said new orders from Japanese plywood importers had continued to come
in. With the exception of general plywood, the overstock situation of
floor-based plywood and other panel products in Japan had been adjusted
in the past few months, he added.
“The demand from Japan will continue to improve and we expect to see some improvement in our plywood prices this month.
“Next year will be a good year with greater demand,” Wong told StarBiz.
He
said the average plywood prices had dropped by 10% to between US$560
and US$580 per cu m now compared with US$600 and US$630 per cu m in the
third quarter.
Plywood fetched an average of US$400 per cu m
before the price was pushed up sharply by aggressive buying from
Japanese importers after the earthquake. Most Japanese importers halted
new orders or slowed down buying between June and September due to high
inventories following aggressive buying in the April-June period.
Actual
demand for timber for reconstruction was not as strong as earlier
anticipated due to the longer time taken to clear up the mess after the
disaster.
AmResearch said in its Dec 1 report that with the
passing of the third extra budget and related bills by the Japanese
parliament, “we now expect reconstruction work on (Japan's) devastated
north-eastern region to gain momentum through the course of next year,
given that most of the towns had already drafted their rebuilding
plans.”
It predicted the demand would sustain timber product prices.
Sarawak
Timber Association's latest figures showed that the state's plywood
exports to Japan fell by more than 52% to 236,200 cu m worth RM472.4mil
in the third quarter from 499,400 cu m valued at RM926.3mil in the
second quarter. First quarter exports totalled 297,200 cu m worth
RM475.8mil.
Japan is Sarawak's biggest plywood market, absorbing
1.03 million cu m or nearly 60% of the 1.75 million cu m valued at
RM2.92bil that the state exported in the first nine months.
There are about 35 plywood mills in Sarawak, with combined installed capacity of about 4 million cu m a year.
Wong
said there was now adequate supply of raw materials to the plywood
mills, which were hit by an acute shortage of logs due to low production
earlier this year because of extremely wet weather. The shortage had
disrupted the mills' production.