Malaysia: Supply crunch forces Shin Yang to slash their plywood shipments to Japan

According to Nikkei Asian Review, due to a lowered supply of timber, Malaysian plywood leader and giant Shin Yang will bring down the amount of tropical plywood used in concrete formwork by 33 per cent in September, from the 45,000cbm seen in May to 30,000cbm.

On the 1st of July, Borneo, Shin Yang’s production hub, introduced the “timber premium” on top of the regular timber tax, which jumped from the general range of 20 to 70 cents (US$0.05 to US$0.16) up to a flat rate of RM12 (US$2.80) per cbm.

Already, plywood producers have raised the prices for shipments to Japan for the loads last month in June, though loads this month in July are set to experience a six per cent price hike, which translates to RM30 (US$6.90) per cbm.

In 2016, according to statistics from Japan’s Ministry of Finance, Japan imported 1.07 million cbm of Malaysian plywood, around 40 per cent of its total plywood imports, of which plywood from Shin Yang made up about half.

With Shin Yang reducing their shipments to Japan, prices of plywood are expected to be pushed up further, with local plywood companies already indicating price hikes for shipments in August. In a quarter, prices may rise a further 12 per cent, or RM60 (US$13.90) per cbm.

With the 2020 Olympics not far off, many redevelopment projects and preparations are in the works in central Tokyo, and hard tropical plywood is vital to creating the concrete formwork. Though the quality of plywood in homegrown Japanese trees is improving, it will not be enough to compensate for the lowered shipments from Malaysia, and the shortage could delay construction.


Source: Nikkei Asian Review