ࡱ>   Y bjbjWW N&==s]rrrrrrr$P,|" H"%) $j ^ -r :rr:::4rrrrrr::rr `A4International Tropical Timber Organization INTERNATIONAL ORGANIZATIONS CENTER,5TH FLOOR, PACIFICO-YOKOHAMA1-1-1, MINATO-MIRAI, NISHI-KU, YOKOHAMA, 220-0012, JAPAN F A C S I M I L E ++81-45-223-1121 Tropical Timber Market Report 1 - 15th September 1998 Contents International Log Prices p1 Domestic Log Prices p3 International Sawnwood Prices p3 Domestic Sawnwood Prices p5 International Ply and Veneer Prices p6 Domestic Ply and Veneer Prices p7 Other Panel Product Prices p7 Prices of Added Value Products p8 Rubberwood and Furniture Prices p8 Report From Japan p9 Report From Korea p10 Report From China p10 An Update on the UK p13 Report from North America p15 World Value of the US Dollar p19 Abbreviations p19 ITTO Fellowship Grants p20 Appendix: Tropical Timber Product Price Trends International Tropical Log Prices Sarawak Log Prices On the 2nd September Malaysia's central bank, Bank Negara, announced that the exchange rate for the ringgit will be set at 3.80 per US dollar for an indefinite period. Apparently there will be no value attached to the ringgit outside Malaysia after Oct. 1. All Malaysian currency overseas will have to be brought back to the country. The ringgit has lost nearly 40 percent of its value against the US dollar since the Asian crisis broke in July 1997. Last week Malaysia formal announced that the economy was in recession as economic growth fell by 6.8% in the second quarter of 1998. The government hopes the new currency regulations will bring more money into the domestic market to boost growth. The steps are a reversal of a policy that favoured controlling the exchange rate by austerity measures and a tight monetary policy. The new currency controls threw financial markets into confusion, and foreign exchange trade came to a virtual halt as dealers scrambled to come to grips with the situation. Sarawak Log Export Prices (FOB) per Cu.m Meranti SQ up US$115-120 ( small US$85-90 ( super small US$55-60 ( 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$125-130 ( Solomon Islands Forestry Department Indicative FOB Prices and forecast price trend Forestry Department Indicative Price Forecast per Cu.m Movement Group 1A Kwila US$120 no change Group 1B Palaquium US$ 95 Mod. fall Planchonella '' Mod. fall Calophyllum '' Mod. fall Pometia '' Mod. fall Gonostylus Mod. fall Schizomeria '' Mod. fall Group 2 Canarium US$ 80 Signif.fall Burckella '' Signif.fall Terminalia '' Signif.fall Group 3 Dillenia US$ 75-80 Signif.fall Celtis US$ 75-80 Signif.fall Alstonia '' Signif.fall Dysoxylum '' Signif.fall Eugenia '' Signif.fall Endospermum '' Signif.fall Vitex US$120 Signif.fall Amoora US$90 Signif.fall 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-C FFR 1350 Ayous 80cm+LM-C FFR 1000 Sapele 80cm+LM-C FFR 1650 Iroko 70cm+LM-C FFR 1650 Myanmar Hardwood log prices are moving down but demand for Teak is firm and prices are expected to improve. Average prices for the most recent Tender Sale held by the Myanma Timber Enterprise on the 24th August are given below. Logs per Hoppus ton FOB Teak July August 3rd Grade US$3289 - 4th Grade US$2958 US$2883 ( SG-1 Grade US$2122 US$2141 ( SG-2 Grade US$1648 US$1589 ( SG-3 Grade - - SG-4 Grade US$958 US$993 ( Padauk Assorted - US$577 Pyinkado US$201 US$196 ( Gurjan US$168 US$124 ( Hnaw US$287 US$270 ( Sagawa US$259 US$245 ( Pyinma - US$207 Thigadu US$171 US$130 ( Thitya - US$232 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 Domestic Log Prices Brazil IBAMA is continuing inspection of forest management plans in Mato Grosso and has revealed that some timber companies are not properly implementing their forest management plans. Some companies have lost their harvesting licenses. The Timber Industry Association of Mato Grosso is promoting a Seminar in Cuiaba (Mato Grosso State). The seminar will be held in 17 and 18 th September, and will focus on the contribution of the timber industry to the social and economic development of the western part of the Amazon region. 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$60-70 ( Core logs US$35-4 ( Sawlogs (Merantis') US$50-65 ( Falkata logs US$40-45 Rubberwood US$26-28 Pine US$50-55 ( Mahoni US$330-350 Malaysia Logs Domestic (SQ ex-log yard) per Cu.m DR Meranti US$120-130 ( Balau US$115-120 Merbau US$140-145 ( Peeler Core logs US$60-65 ( Rubberwood US$23-23 Keruing US$120-125 Peru Domestic Log Prices Pucallpa per Cu.m Caoba (Swietenia macrophylla) US$227 ( Capirona (Calycophylum spruceanum) US$33 ( Catahua (Hura crepitans) US$15 Cedro (Cedrela odorata) US$110 ( Estoraque (Miroxilon balsamun)US$40 ( Huayruro (Ormosia sp) US$48 ( Tornillo (Cedrelinga catenaeformis) US$59 ( International Sawnwood Prices Brazil The Asian crisis, and now the Russia crisis, is having a strong impact on the Brazilian economy. Brazil lost around US$6 billion in foreign reserves during August. Reserves dropped US$10 bil. to US$59 bil. over the past two weeks and the government has increased interest rates to a massive 49% in an effort to stem any further outflows of capital. The higher interest rates will be an added burden to the timber industry. 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$950 ( Cedro (Red Cedar) US$508 ( Cumala (Virola) US$206 ( Guyana Guyana continues to feel the impact of the South East Asian crisis, export markets are depressed and producers are supplying more timber to the already depressed domestic market. More recently, a cause for concern is the increasingly depressed market in North America, which is a major market for Guyanas plywood (in 1997, 69% of plywood exports went to North America). On August 14, 1998, the Forest Products Association (FPA) of Guyana issued a press statement concerning the state of the forest industry, in which it requested the government to assist the industry to cope with the crisis. Among other things the FPA asked the government to review the exchange rate mechanisms and to consider financing a kiln drying facility. In the light of the changing market conditions, the Guyana Forestry Commission is currently undertaking a review of the industry so as to formulate policy options to address industry concerns. Ghana 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 Length DM300-505 Wawa Square Edged KD Lumber range DM400-600 Plantation Teak per Cu.m Flooring Specs for Hong Kong and Macau US$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$425-435 Seraya Scantlings (75x125 KD) US$540-550 Sepetir Boards US$180-190 ( Perupok (25mm&37mm KD) US$690-700 ( K.Semangkok (25mm&37mmKD) US$690-700 Taiwan Province Imports Rubberwood per Cu.m 25mm boards US$230-240 ( 50-75mm squares US$285-295 ( 75-100mm squares US$340-350 Sepetir GMS (AD) US$195-200 ( Ramin less than 2 ft. US$510-525 ( 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 In the domestic market lumber from the Amazon is gradually loosing out to eucalyptus. In order to keep their market share producers in the north are reducing prices. There is information that some sawmills, that used to export to Asia, are selling sawn LKS in the domestic market at prices as low as US$120 per Cu.m, this price is lower than that of pine. 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$593 ( Capirona (Calycophylum spruceanum) US$106 ( Catahua (Hura crepitans) US$64 ( Cedro (Cedrela odorata) US$339 ( Huayruro (Ormosia sp) US$145 ( Shihuahuaco (Dipterex sp) US$141 ( Tornillo (Cedrelinga catenaeformis) US$198 ( Copaiba (Copaifera) US$120 ( 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 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$160-170 ( Kempas50mm by (75,100&125mm) US$120-130 ( Red Meranti (22,25&30mm by180+mm) US$210-220 ( Rubberwood 25mm & 50mm Boards US$150-160 ( 50mm squares US$195-200 ( 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$275-280 ( 3mm US$245-255 ( 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 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 The timber industries are experiencing price increases for freight containers, particularly for European ports. Container charges are also increasing for other routes and, in addition, there is a shortage of containers. The shortage of containers is due to the imbalance of cargo movements as, for the past few months, imports have dropped drastically as a result of the economic situation in Malaysia. Malaysia experienced a trade surplus for the past few months averaging some RM2.0 billion (US$525 million). In August the trade surplus was about RM2.7 billion (US$710 million). The trade surplus is likely to continue as Malaysian manufacturers are currently very competitive in the international market. MR Grade BB/CC FOB per Cu.m 2.7mm US$275-285 ( 3mm US$245-255 ( 3.6mm US$210-220 9-18mm US$180-190 Domestic plywood 3.6mm US$215-220 ( 9-18mm US$210-215 ( Domestic Plywood Prices Brazil 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 Anti-dumping tariffs for hardboards According to recent press releases in August, and following the application by 8 EU hardboard producers, the EU-Commission imposed anti-dumping tariffs on imports of raw and processed hardboard from Brazil, Bulgaria, Estonia, Latvia, Lithuania, Poland and Russia. These preliminary anti-dumping tariffs are calculated from the net-prices free EU-border, prior to customs-clearance. The dumping price gaps were calculated in per cent, based on the price CIF EU-border. The Commission fixed the following anti-dumping tariffs, related to the individual producer (for companies not participating in the investigation the tariffs were fixed under the heading "other"): Brazilian Duratex SA. 23.1% (other 28.2%). 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$80-95 ( Domestic Particleboard 9mm US$130 12-15mm US$115 18mm US$100 MDF Export (FOB) 12-18mm US$115-120 ( MDF Domestic 12-18mmUS$160-170 ( Taiwan Province of China, Imports MDF per Cu.m Domestic Prices 3mm thick US$225-235 ( 16-18mm x 4' x 8' US$175-185 Particleboard per Cu.m 12-18mm (4x8) US$130-140 ( 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$155-160 ( Prices of Added Value Products Indonesia Mouldings Ramin casings per Cu.m (for the Italian market) US$680-690 ( Laminated Scantlings US$330-340 ( Laminated Boards Falkata wood US$250-265 ( 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$480-490 ( 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 Finger jointed per Cu.m laminated boards US$515-530 ( top grade US$590-600 ( Dining table Solid rubberwood laminated top 3' x 5' with extension leaf US$28-30ea Windsor Chair US$8.0-8.5ea Colonial Chair US$10.0-11.0ea Queen Anne Chair (with soft seat) without arm US$15.5-16.5ea ( with arm US$21-22ea ( 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 Taiwan P.o.C is expected to post its worst economic growth for years in 1998 but, even at the current rates, the island remains one of the bright spots in Asia where countries are reeling from economic crises. The island's GDP is expected to grow 4.9% in 1998 and 5.2% in 1999. Exports, the previous 'engine' of growth, are declining as Asian markets crumble, however, strong private investment and accelerated public works activity is sustaining growth. Furniture Dining suite (FOB) Oak Veneered MDF tables and chairs (6 per set) 4ft dia. US$110-120per set ( Occasional table Cherry veneer top 2ftx4ft US$20-25ea Report From Japan Unstable Currencies Fluctuating world currencies are affecting wood products imports into Japan. The problems in Russia will certainly impact producers in Russia and this casts dark shadow over future supplies of logs for Japan. Meanwhile, the Malaysian government revalued the ringgit which could push export prices higher. In Japan, the rate of the yen against the dollar soared more than 10 points during the past week. These erratic currency rate changes make future dealings extremely uncertain. Theoretically, the devalued rouble should encourage exports but log supply is extremely tight with very few offers available. The CIF price for Red pine for 22-36cm by 4 metre jumped from $95 to $103 per Cu.m. Larch prices moved from $85 to $90 per Cu.m CIF. Whitewood prices are getting close to $80. Traders complain that prices are moving without logs being available. In Malaysia export prices for logs and plywood are moving up. Meranti regular (SQ up) FOB price was US $110 115, per Cu.m and is now around US$120. Plywood prices are also moving up by around US$15 to 20, per Cu.m with concrete formboard at US$220-230 per Cu.m FOB. Due to the depressed plywood market in Japan even previous offers were not acceptable so these new offers make much more difficult for Japanese importers. The Japanese yen gained about 7% on the dollar but the increases in export price in Malaysia makes the cost higher for Japanese importers. Some buyers are shifting to Indonesia as prices are US$230-235 per Cu.m C&F (almost same as Malaysian FOB) however prices are not low enough to correspond to current market expectations. Japanese buyers are now watching to see if the yen will continue to strengthen which may make these prices acceptable. Imports of Forest Products Down Forest products imports for the first half of this year totalled 564 billion yen a drop of 43% compared to the same period last year. The amount of imported logs and lumber declined to a historically low level down 50% in value terms and down 37% in terms of volume. The biggest losers are North American and European lumber down 60% in value terms and 58% in volume. Softwood plywood imports from North America dropped 60% being able to compete with S.E. Asian products. Total plywood imports fell by 1.1 mil. Cu.m compared to the same period last year. Log, Lumber and Panel Prices Logs For Plywood Manufacturing CIF Price Yen per Koku Meranti (Hill, Sarawak) Medium Mixed 5,500 ( Meranti (Hill, Sarawak) STD Mixed 5,600 ( Meranti (Hill, Sarawak) Small Lot (SM60%, SSM40%) 4,600 ( Taun, Calophyllum (PNG) and others 4,600 Mix Light Hardwood (PNG G3-G5 grade) 3,800 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 9,500 Agathis (Sarawak) Select 8,500 ( 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 Report from Korea 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 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 Competition Fiercer As a consequence of the rapid development of China's economy, the growing rate of home ownership and the start-up of major infrastructure projects, demand for timber is increasing. At the same time, competition between products is becoming fiercer, particularly in Shanghai, which ranks first in consumption of imported timber. Over recent months the trade has witnessed several trends: Firstly, the imports of Douglas fir, Spruce, Hemlock from the US has declined sharply and these timbers did feature prominently in the consumption of imported timbers. On the other hand imports of Oak, Maple, Cherry, Beech and other hardwoods from North America and Europe (France, Germany and Italy) have increased gradually to meet the demand for high grade decorative timber. In order to meet the domestic demand for high grade furniture, doors, windows, flooring and decorative veneer, imports through the border trade of high value species such as teak and pterocarpus represents a rising trend. Okoume log imports from West Africa for plywood manufacture have weakened because prices for imported plywood from Indonesia and Malaysia have fallen sharply as a result of the SE Asian financial crisis. It is reported that the price of the plywood has fallen to the current of 1600 yuan per Cu.m from a high of 2500 yuan. Timbers including Ash, Oak and Pinus sylvestris imported from Russia and Korea sell well because of their moderate price and good quality. Pinus sylvestris logs of good quality and straight grain from Russian natural forests, for example, sells at a price of only 800 yuan per Cu.m while the US Douglas fir log from forest plantations sells at a much higher price of 1350 yuan per Cu.m. Increase in Plywood Transit According to recently released statistics from the government of Hong Kong Special Zone, the transit of Indonesian and Malaysian plywood from Hong Kong to mainland China increased to 200,000 cubic metres the first quarter of this year, a rise of around 75% over the same period last year The reason for the rapid increase in the transiting of plywood from Hong Kong to mainland China was due to Indonesian and Malaysian plywood becoming more price competitive, this gave more traders in Hong Kong better opportunities to sell through wider networks on the mainland. The government of China encourages plywood imports as a priority since domestic plywood supplies cannot meet the demand in mainland China. According to news coming from Hong Kong timber dealers, the price for Indonesian and Malaysian plywood to Hong Kong is US$ 280 per Cu.m, down by 20% over the same period of last year. The price quotation for some plywood is less than US$250, down 30%. Some traders are complaining that the quality of plywood is hard to guarantee at these prices. Demand in Guangdong It is apparent that, in 1998, demand for timber for agriculture, infrastructural works, interior decoration and furniture has increased considerably in Guangdong, especially at Guangzhou and its adjacent markets. At present, prices at Guangdong timber market are rising. Chinese red pine logs 4 metres length and with a diameter of 18-28 centimetres are selling at a price of 550 yuan per Cu.m at the forest site and at 710 yuan per Cu.m in the consumer market. The rapid development of construction in Guangdong province and growing exports has promoted a rise in timber consumption. Timber stocks appears low currently. Stocks in forest regions are said to be down by 8% over the same time of last year. Over the whole of Guangdong province log stocks have fallen by nearly a half compared to the same period of last year and sawnwood stocks are reportedly down by about a third. As to domestic available resources, these are becomes fewer and fewer. The measures introduced to protect the natural forests this year have influenced the timber market in Guangdong. It is forecast that little timber will enter the Guangdong market from near-by timber-producing provinces of Guangxi and Guizhou. Boost to Housing Starts China will boost investment in residential housing construction in an effort to help reach the targeted 8% GDP growth this year. The country plans to build 105.5 million square metres of low-cost housing in the remaining months of this year, according to Vice Minister of Construction, Song Chunhua. Overall, China's state-owned companies had began 366 million square metres of residential housing construction in the first seven months of this year, up 16% form the year-earlier period. The new low-cost housing will involve total investment of 80.58 billion yuan ($9.73 billion), of which 30.05 billion yuan will reportedly come from state commercial banks, local governments and real estate companies. The government has doubled its housing construction investment targets of the year. Investment in commercial building increased 22% to 77.52 billion yuan in the period January to July. yuan per Cu.m Shanghai Radiate pine log length:6m, dia. 26cm+ 900 Douglas fir log 28cm 1200 ( Lauan lumber ( mixed) 1200 ( 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 1450 ( 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 11000 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 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 From Europe an Update on the UK In 1997 the UK production of kitchen furniture was worth ECU 941.3 million. In the same year, consumption of kitchen furniture was ECU 953.7 million (with the UK accounting for 10.6% of total European consumption). Exports were worth ECU 64.3 million, while imports were ECU 76.7 million. Forest Fencing Ltd, the largest UK wooden garden products manufacturer, has been taken over by a group of managers through a buy-in-buy-out arrangement. Forest Fencing operates five production plants and is estimated to have a 20% share of the wooden garden products sector in the UK. The company is now planning to buy businesses in related areas of manufacturing. From February to April 1998 the output of sawmilling and planing firms increased in the UK by 17.6% compared to the same period of 1997. The output of furniture (excluding kitchen furniture) fell by 11%. In May the factory gate prices of UK producers of wood and wood products registered a 0.3% decrease compared with May 1997. Manufacturer's Prices Wooden Windows Upper Price Hardwood 120x135cm Sterling, 301.15 Medium Price Hardwood 120x135cm Sterling 244.75 Lower Price Softwood 120x135cm Sterling 115.20 Solid Wooden Doors Upper Price Meranti (new range) 76.2x198.1x3.5cm Sterling 351.00 Medium Price Sapele 76.2x198.1x3.5cm Sterling 142.20 Lower Price Veneered 76.2x198.1x3.5cm Sterling 49.00 Kitchen Chair Upper Price Solid Oak Sterling 333.00 Dining Chair Upper Price African Mahogany Sterling 333.00 Medium Price African Mahogany Sterling 224.00 ( Dining Table Upper Price African Mahogany 80x160cm Sterling 1134.00 Medium Price African Mahogany 80x160cm Sterling1006.00 ( Lower Price African Mahogany 80x160cm Sterling 693.00 Furniture and Components Wardrobe Door Lower Price 50x180cm Sterling 63.15 Kitchen Cabinet Door 71.5x49.5cm Medium Price Oak Sterling 19.90 Drawer Front Upper Price Melamine Faced Particleboard 100x10cm Sterling 0.77/pc Medium Price Melamine Faced Particleboard 100x10cm Sterling 0.62/pc Lower Price Melamine Faced Particleboard 100x10cm Sterling 0.55/pc 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 Stg225 ( 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 Chair US$9.00 Stg9.00 8" Salad bowl Stg2.00 Stg5.00 Other News from Europe In the first six months of 1998 the French group Seribo (manufacturer of furniture and parquet), achieved a turnover of FFr 593 million, registering a 4.4% increase over the same period of 1997. In order to return to profits and to boost business development, the German Alno, kitchen furniture producer based in Pfullendorf, will cut about 200 jobs by next year. The company will also invest DM 42 million to modernise an assembly plant: this will reduce the assembly time for a cupboard by 50%. In 1998 the furniture market in Hungary is expected to grow in real terms by between 5-10% over 1997, when it reached Ft 45-50 billion; these figures do not include the office furniture market, which was worth about Ft 18 billion last year. In 1998 imports should benefit from the expected domestic market growth, in 1997 imports registered a 10.3% increase to US$ 192.1 million. In 1997 the French furniture industry reported a turnover of FFr 66 billion. In the same year, furniture imports were worth FFr 18.3 billion, compared to FFr 16.8 billion in 1996. Exports grew from FFr 10.2 billion in 1996 to FFr 11.3 billion in 1997. The French furniture manufacturers announced, during the last congress of Unifa (the French association of furniture firms), that they aim at doubling their export sales by the year 2005. The Finnish Kontiopuu, a kitchen furniture producer, has been taken over by the Russian Voltrade. Following this change of ownership, Kontiopuu's products will be sold in outlets to be set up in Moscow. Sales in the Russian market are expected to reach several million Finnish marks a year. Preparing for the Euro Businesses preparing financial systems for a smooth changeover to the Euro can now consult practical guidelines published by the European Commission. Although companies in non-participating Member States will be affected less by the introduction of the Euro, the guidelines state that they should be prepared to deal with transactions denominated in Euros. Copies of Preparing Financial Systems for the Euro can be downloaded from the Internet at http://europa.eu.int/comm/dg15 or ordered by post from: Unit DG XV.D.3, C107 02/57, European Commission, 200 rue de la Loi, B-1049 Brussels, Belgium, Fax: 00 32 2 299 4745. Report from North America The American economy is still strong. New and existing housing sales are healthy and consumer confidence is at a 28-year high. Inflation appears to be under control and the Federal Reserve Board appears ready to lower interest rates. There are some signs, however, that the US economy may cool down during the second half of this year and into 1999. Many indicators point to a less vibrant business environment. Similarly, the lumber business is showing signs of weakness and prices are generally lower. After two hectic years, the hardwood market has definitely stabilised in recent months according to AKTRIN the N.American market research institute. Some inventory reduction has been going on in the furniture and secondary wood product manufacturing segments. While this is partially due to the ready availability of lumber from producers, it is also an indication of smaller order-book positions of manufacturers. Summer is traditionally a slow season as many logging operations and sawmills are closed for vacations or maintenance. The demand for lumber by manufacturers is subject to the same cyclical influences, infact, lumber production frequently out-produces market demand in the summer months. Apart from seasonal factors, declining exports to many Asian destinations are a serious drag on sawmills production. Unfortunately the days have gone when lower export shipments happily coincided with a very strong US economy. The excess lumber from sagging exports can no longer be absorbed entirely by domestic users. While there has been a recent increase in exports to China and Taiwan, the Far Eastern markets are in a state of chaos that will continue well into the next year. On a more positive note, the summer vacation lull in Europe came to an end and shipments to that region should improve soon. The Mexican market is performing well and the outlook for the next few months should remain fairly positive. Profit margins for most hardwood suppliers are shrinking. This is the direct result of slower sales, sawmills' limited control over their raw material costs, and the competitive business climate. In anticipation of slower sales, most sawmills are not increasing their output. Thus, there is not much over-production at this time, preventing any major price erosion for most lumber items. Some sawmills have reduced their inventory levels in order to improve their profitability. Many mills are taking steps to create additional revenues to remain viable. Increasingly, mills are using lower grades to produce crating, pallets, and dimension goods. In some cases these products are for specialised industrial niches. Similarly, dry kiln operators are attacking the profitability dilemma by improving quality and reducing drying degrade. The hardwood industry has become more astute in locating alternative opportunities in order to counter an erosion of their core business. As is normal in times of slower sales, buyers are becoming more demanding. Downstream product manufacturers are asking for "just-in-time shipments" from hardwood suppliers, allowing them to reduce their own investments in lumber inventories. Users of hardwood lumber are also asking for special qualities such as no mineral in the wood, colour selection, special widths, lengths and grades. Selling lumber is no longer a simple process where salesmen have only one price for each species, grade and thickness. US domestic demand for hardwood lumber will be steady for the next few months followed by a slight export induced upswing in the fall. Supply of most hardwood species is anticipated to be adequate to meet the demand. Under this scenario, the outlook for the balance of 1998 and early 1999 is fair and prices for most species and grades should not decline much further. Outlook by Region Northern Region: The order backlog for lumber producers is good. Some sawmill operators shortened or eliminated their traditional shutdown during the vacation period. Appalachian Region: With the end of the vacation period, most sawmills are operational again and business is picking up where it left before the holiday. In some areas, shipments have been delayed due to transportation problems. In West Virginia, rail car shortages as well as truck availability has been poor. The rail car shortage is in large part due to many rail lines having been abandoned or taken over by short-lines with limited services. Southern Region: The volume of lumber moving from Southern producers to Mexico is quite strong. This, coupled with a steady increase in shipments to the West Coast and strong moulding demand, has left most producers with good order book positions. Unusually dry weather has resulted in most mills having a normal supply of logs. Outlook by Species The following reviews the trends for various species. All prices refer to 1000 board feet (MBF, 1-inch thick, top quality. Imported lumber prices are at West Coast port of entry. Approximately $ 50.00 will have to be added for East Coast ports. Mahogany: The steep price increases for Mahogany last year have come to an end. Since the beginning of this year, prices have remained remarkably stable, nevertheless, the price of the timber is still 7% higher than one year ago. Mahogany (at West coast port of entry) KD US$2885 No change AD US$2525 No change Meranti: Prices for the different kinds of Meranti have remained stable since December 1997. However, prior to that date, Meranti was subject to significant inflationary pressure. Today's prices are almost 4% above those paid in July of 1997. Meranti (at West coast port of entry) Clear, dark red KD US$2385 No change Clear, light red KD US$2220 No change Red Oak: Sales of Red Oak are quite strong as manufacturers of cabinets, furniture, flooring and other secondary wood products have excellent order backlogs. This applies in particular to the Northern and Southern growing regions. Summer is the prime drying season for Red Oak. Much lumber is coming onto the market which will prevent prices from rising in the coming months. The demand for common grade lumber, as well as for thick stocks, may slow slightly, but prices may decline only marginally, if at all. Housing starts are still good in the US, thus flooring Oak prices will remain firm. Red Oak Northern Region KD US$1608 ( US$5 AD US$1290 No change Southern Region KD US$1323 ( US$10 AD US$1025 ( US$5 Appalachians KD US$1488 ( US$5 AD US$1160 ( US$5 White Oak: The White Oak market suffers under sluggish export sales. The demand for common grade White Oak is particularly slow and intense competition has resulted in a softening of prices in overseas markets. The domestic market has absorbed some of the export shortfall, but a build-up of excess inventory could not be prevented. Exports of White Oak to Europe should improve this fall. The Spanish White Oak market remained relatively good. White Oak Northern Region KD US$1330 No Change AD US$945 ( US$10 Southern Region KD US$1210 ( US$40 AD US$920 No Change Appalachians KD US$1393 No Change AD US$1018 ( US$5 Hard Maple: After two years of record summer output, the market for Hard Maple has softened noticeably and prices are lower in all regions and for all quality grades. With winter-cut lumber gradually being used up, it is possible that prices will strengthen slightly this fall. Hard Maple Northern Region KD US$1825 ( US$50 AD US$1335 ( US$50 Appalachians KD US$1725 ( US$50 AD US$1245 ( US$65 Soft Maple: Recently, the demand for Soft Maple has been fair at best. Sales of Soft Maple may increase in the coming months as many buyers will use Soft Maple as an alternative species for Cherry. Prices of Soft Maple may follow in the wake of the steady price increase of Cherry. Soft Maple North Region KD US$1228 No Change AD US$890 ( US$5 Appalachian KD US$1288 ( US$5 AD US$940 (US$5 Cherry: The lumber and veneer markets for Cherry is booming and the common grades of the wood are also in strong demand. During the next few months Cherry production will be at its seasonal low. Supply is likely to fall short of demand, resulting in further price increases. Some manufacturers have started to switch to alternative species such as Alder and Soft Maple. Cherry Appalachians KD US$2705 ( US$20 AD US$2235 No Change Walnut: Walnut prices came under some pressure during summer, however, sales have improved recently. There is a renewed demand from European as well as domestic markets, which may further strengthen in the next few months. Analysts expect to see some firming in Walnut prices, first in the upper grades, then followed by the common grades. Walnut Appalachians KD US$1903 ( US$20 AD US$1385 No Change Yellow Birch: Yellow Birch prices have remained steady. With a good demand for white cabinets and furniture, Birch should continue to enjoy a favourable market position. Birch is often used as a substitute for higher priced species, such as Hard Maple and Cherry. Ash: The demand for the mid- and lower grades of Ash has been on the increase over the last few months, but the upper grades have been slow to follow. The traditional export markets for Ash have not been active, and little improvement is expected in the next few months. It is possible that we will see an increased domestic demand and firmer prices in the fall. Basswood: Basswood is widely used for wooden blind and shutters. With new housing starts at high levels and remodelling business good, Basswood demand should remain steady for a while. However, the increased use of substitute species such as Ramin from South East Asia and Poplar are causing stiff competition for Basswood and this will prevent prices from rising much above present levels. Poplar: The demand for Poplar is primarily domestic, although some shipments go to Mexico and China. Sales of upper grade Poplar are steady, but sales of the common grades are only fair. Sawmills have not increased the production of Poplar lumber this spring and summer as better returns can be obtained for veneer grade Poplar logs. Some steadying in Poplar prices may be possible this fall. Compiled by AKTRIN from various sources including Hardwood Review,HYPERLINK "http://www.Hardwoodreview.com" www.Hardwoodreview.com If any of your colleagues would like to receive an E-mail copy of our twice monthly market report, please send their E-mail address to: mjadams@itto.or.jp  Abbreviations LM Loyale Merchant, a grade of log parcel Cu.m Cubic Metre FOB Free-on-Board SQ Sawmill Quality SSQ Select Sawmill Quality KD Kiln Dry AD Air Dry FAS Sawnwood Grade First and Boule A Log Sawn Through and Through Second the boards from one log are bundled WBP Water and Boil Proof together MR Moisture Resistant BB/CC Grade B faced and Grade C backed pc per piece Plywood ea each MBF 1000 Board Feet BF Board Foot Sq.Ft Square Foot MDF Medium Density Fibreboard FFR French Franc F.CFA CFA Franc Koku 0.278 Cu.m or 120BF Price has moved up or down ITTO FELLOWSHIP PROGRAMME GRANTS ITTO offers grants for training and technology transfer through its fellowship programme to promote human resource development, development of downstream timber industries and institutional strengthening in the forestry sectors of member countries. The priority areas are: Forest Industry; Economic Information and Market Intelligence; and Reforestation and Forest Management. Grants are provided for a variety of activities including: study tours of forests, mills and research institutions; participation in conferences, workshops and training courses; postgraduate programmes (partial tuition grants), not including Ph.D.; short-term research; technology transfer to tropical producer member countries; and preparation of technical documents. Applications are required to conform with ITTOs general objectives in respect of sustainable forest management, utilisation and trade and, in particular, the Year 2000 Objective. The grant is a maximum of US$12,000. Only nationals of ITTO member countries are eligible to apply. A Fellowship Selection Committee appraises applications at the ITTO Council Sessions in May and November/December each year. Applicants should note that grant funded activities should not start until at least one month after the relevant Council Session. The next deadline for applications is 10th March 1999 and this is for activities that can begin in June 1999 at the earliest. 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