Japan’s Forest Agency projects on new housing starts and forestry industry

The Forestry Agency held wood demand projection meeting on March 23. Average new housing starts forecasted by 12 private think tanks are 847,000 units and two think tanks forecasted less than 800,000 units. Major house builders also reported that orders are declining and it is general view that starts of detached unit would continue to be severed by slowdown of economic condition resulted by corona virus epidemic.

The forecast by think tanks is based on forecast in late February and steep drop of stock market in March and depressed economic condition by coronavirus are not reflected so next forecast would be much lower.

Log exports

As for log export to China, the stagnating Chinese economy and heavy rush of European beetle damaged logs into China, the export volume would drop largely in 2020.

For domestic wood use, the main concern is how long the coronavirus pandemic would last and how badly influence the economy. The general view is that the demand would be lower than last year by dropping housing starts.

Logs and lumber

For logs to manufacture lumber, demand decrease would be as bad as following year of Lehman shock in 2008 so the second quarter supply would be down by 31.7% from the same quarter last year and third quarter would be down by 17.9%.

Imported logs and lumber supply

On imported logs and lumber supply, second quarter would be down compared to last year. Particularly, purchase of radiate pine logs and lumber from New Zealand and Chile for March and April shipment would be sharply down by 55.6%. For the third quarter, there are views that the demand should recover with economic stimulus measures and corona virus epidemic comes to an end but other views are that the confusion would continue so that the demand would keep dwindling.