M’sia to gain from US duties on Chinese plywood imports

American buyers also turning to exporters from Indonesia

KUCHING: Plywood exporters from Malaysia and Indonesia stands to benefit from the United States’ move to impose anti-dumping duties on Chinese plywood imports.

According to the International Tropical Timber Organisation (ITTO), American buyers are fast turning to plywood imports from Malaysia and Indonesia thus creating an opportunity for these South-East Asian (SEA) exporters to raise their plywood prices.

“Trade analysts feel that in the short term, the winners will be SEA shippers while the losers will be the consumers from the US,” said ITTO in its latest April 1-April 15 timber tropical market report.

The Malaysian Timber Industry Board (MTIB) 2017 figures show that Malaysia exported RM222mil worth of plywood to the US, which ranked fifth as the main importer from Malaysia.

Japan was the No. 1 importer, absorbing RM2.27bil worth of Malaysian plywood last year. Malaysia exported RM23.2bil worth of timber and timber products in 2017, out of which plywood made up RM4.6bil.

The report quoted Association of Indonesian Forest Concessionaires executive director Purwadi Soeprihanto as saying that in first quarter-2018, Indonesia recorded a 28% jump in processed wood shipments to the US as buyers there sought out suppliers to fill the gap left by China.

He expects the shift by US importers to Indonesian suppliers, especially of plywood, to continue for the rest of this year.

“Export prices of Indonesian plywood continue to climb with no sign of slowing down.

In particular, thin panel of 2.5mm prices shot up to about US$1,000 per cu m, the highest record.

“The weather in Indonesia is much worse than Malaysia and with tightening control of illegal harvest, log production is plunging. Log production seems to have dropped more than half of normal pace with no sign of recovery.

“With this log supply shortage, plywood mills’ deliveries are largely delayed.

“Even regular suppliers are two to three months behind schedule and some have not delivered volumes contracted last summer,” said the report.

The ITTO said in Malaysia due to the prolonging raining season, log production continued to be slow and this had forced some plywood mills to shut down (due to shortage of raw materials).

In both Malaysia and Indonesia, it said high quality logs, which are required to produce thin plywood, floor base and coated concrete forming panel, were now very hard to get. This has resulted in plywood mills left with little log inventories.

According to ITTO, the supply of Malaysian plywood for Japan is also largely delayed. Future supply of South Sea (tropical) hardwood plywood is, therefore, becoming more uncertain.

Supply of coated concrete forming panel is particularly tight so the prices are firming. Prices of 3x6 JAS coated concrete forming panel are 1,410-1,420 yen per sheet, up 10 yen from February.

The importers sheet.

“Supply of coated concrete forming panel is particularly tight so the prices are firming.

“Prices of 3x6 JAS coated concrete forming panel are 1,410-1,420 yen per sheet, up 10 yen from February.

The importers are now asking 1,450 yen per sheet but there are still some low price offers, so price hike is not going so easy.”

Saying that the Japanese market for thin plywood is currently very active, the report said Japanese buyers had attributed one of the key reasons for the increased demand for plywood to the impending increase in Japan’s consumption tax from current 8% to 10% in October next year.

The move has spurred the building of new homes and an expansion of activity in home renovations before the new consumption tax takes effect.

The other reason is the rising demand for all construction materials, including plywood, for the construction work in preparation for the 2020 Summer Olympic Games which Tokyo will host. are asking 1,450 yen per