Wood demand and supply projection for Japan in 2017

Japan’s Forestry Agency’s second meeting estimates the following trends for wood demand and supply in 2017.

Forecast for domestic log supply is difficult because of the damage caused by severe heavy rain.

Demand projection for the second half of the year is likely to decline slightly.

The demand for domestic lumber in the second half of last year was active, such that supply was short. If demand continues this year, lumber supply will be tight again.

However, the Japan Federation Housing Organization estimates that detached units during the second quarter this year declined by 13 points. Furthermore, average housing starts in 2017 are estimated to be 969,000 units compared to 974,000 units in 2016, according to 11 private think tanks. If true, domestic lumber demand will fall, easing supply constraints.

Log demand for plywood may exceed last year as new plants that start up next year will start buying logs this year. Supply will follow demand increments, barring damages by heavy rain.

North American Douglas fir log supply for the fourth quarter will remain the same as last year based on the assumption that the demand for lumber will stay firm so that log inventories will fall.

For the first quarter of next year, log supply in North America will recover but arrivals will decline by about 2.1 per cent.

North American lumber supply is likely to increase toward the end of the year so supply comes up to be about the same as the fourth quarter last year.

Third quarter supply of laminated lumber will increase by 5.8 per cent. Import will fall by 3.4 per cent but domestic supply will increase by 11 per cent. The domestic supply for the second half of the year will exceed last year’s.

In the fourth quarter, buying will same as last year although this will fall 10.7 per cent for the first quarter of 2018. Demand will also decline so shortage of supply is unlikely.

European lumber import for the fourth quarter is expected to increase by 6.8 per cent by aggressive purchase of lamina; in the first quarter, the supply will decline by 6.3 per cent as purchase of small size common lumber reduces.

Radiata pine logs and lumber from Chile and New Zealand for the third and fourth quarter this year have increased. However supply in the fourth quarter supply will drop as demand falls. Log supply in 2017 will be 15.3 per cent less than last year while that of lumber would be 2.7 per cent more.


Source: ITTO