U.S. Now Leading Supplier of Logs to Japan
Importation of logs to Japan has declined for four consecutive years and was in 2008, 34
percent lower than the previous year and 50 percent lower than in 2004, reports the
Wood Resource Quarterly. Practically the entire decline from 2007 has been that of
Russian shipments and the US has now become the leading supplier of logs to Japan.
May 15, 2009 - Japan is the second largest importer of logs in the world after
China. For many years, sawmills in the country have been very dependent on the
importation of sawlogs for their wood raw-material needs, relying on 35 percent foreign
logs in 2008. Imports of logs have fallen over the last ten years, while imports of
processed products such as lumber, plywood and fiberboard have increased during much
of the past decade. In 2008, log imports equaled only 40 percent of 1998 imports,
whereas import volumes of lumber and wood-based panels were practically the same as
ten years ago.
Over the past 15 years, Russia has been a very important supplier of logs to sawmills and
plywood mills in Japan and has consistently had the largest market share of the Japanese
log market. This share was 28 percent in 1993 and grew to almost 55 percent at the peak
in 2006, but has fallen substantially since then, reaching a low of only 17 percent in early
2009. This is because Russia is no longer the low-cost timber source it once was. Only
five years ago, Russian sawlog prices in Japan were on par with Radiata pine from New
Zealand and over US$100/m3 cheaper than US Douglas-fir logs. Now, however, they are
75 percent higher than Radiata pine and only US$30/m3 less expensive than Douglas-fir.
Japanese companies are likely to increase imports of logs from New Zealand and North
America because costs for Russian logs are going up and the supply is considered less
reliable long-term. Short-term, this shift is more a matter of changing markets shares
from Russia to other supplying regions, but as the housing starts increase in Japan in
2010 or 2011 as they are expected to do, log import volumes will go up and opportunities
will therefore exist for log exporters in the US, Canada, New Zealand and even Europe to
ship more logs to Japan in the future if the freight rates are acceptable.
SOURCE: Wood Resources International LLC