Malaysia’s Shin Yang group will reduce Japan-bound shipments of tropical plywood used in concrete formwork by about 30 per cent starting in September, according to a Nikkei report.
The company, one of the largest in Sarawak has sent a memo to trading companies in Japan of the cutback due to reduced supply of timber. Shipments to Japan for September will fall 33 per cent to roughly 30,000 cbm compared to May figures.
To protect its natural resources, the state government has decided to strengthen law enforcement against illegal logging, ban cutting of small trees below a specified diameter, and urge timber companies to strictly adhere to annual limits of cutting.
Plywood makers have already raised prices for Japan shipments for June loads. And July loads are set to be around six per cent pricier, a hike of about $30 per cbm.
Last year, Japan imported 1.07 million cbm Malaysian plywood, or 40 per cent of all its plywood imports, according to trade statistics from Japan’s Ministry of Finance. Supplies from Shin Yang make up half that volume.
Reduced shipments from Shin Yang are expected to push up prices further. Local plywood companies have already indicated price hikes for August loads. In just three months, the price probably will rise by around $60 per cbm or 12 per cent.
Many redevelopment projects are underway in central Tokyo and elsewhere, as the capital prepares to host the 2020 Tokyo Olympics. Hard tropical plywood is essential to making concrete formwork. Even though the quality of formwork plywood made from Japan-grown trees is improving, it is not enough to fully compensate for reduced shipments from Malaysia.
The shortage of formwork could delay construction.