Japan might be the world’s fourth-largest importer of timber products—but it might just be the hottest right now. Wood Central can reveal that importers are now eyeing the land of the rising sun – as the global timber market grapples with a slowdown in construction activity across the US, China and even a faltering India.
As reported by the Japanese Ministry of Finance, the country’s softwood lumber imports increased by 23% year-on-year to 1,856 thousand cubic metres for the year to June – with global importers now commanding the world’s highest prices ($353 per cubic metre), more than compensating for the higher costs faced by European and North American timber mills.
According to government data, Canada leads the way with 460,000 cubic metres of softwood (an increase of 37% or 25% of total imports), followed by Sweden with 369,000 cubic metres (up 36%), Finland with 289,000 cubic metres (up 5%), and Russia, one of the few Western countries that has not enforced sanctions, with 265,000 cubic metres (also up 12%).
The surge in lumber has come as importers and householders have been crunched by a weak yen – leading to local manufacturers establishing export markets to trade millions of cypress trees now being cut down.
So, what is fueling the new wave of timber imports?
In January, Wood Central reported that Prime Minister Fumio Kishida introduced a suite of new policies aimed at increasing timber use in buildings and, for the first time, opened up visas for foreigners working in timber fabrication and installation.
Then there is the “Promotion for the Use of Wood in Public Buildings,” which now encourages the use of timber in buildings up to 3 storeys in height and 3000 square metres in footprint. Wood Central understands that these policies, along with the World Expo site, have led to a wave of low-rise, mid-rise and high-rise timber projects built by fabricators like Shinohara Shoten.
“About 80% of our market is residential construction, with 20% (growing) into the non-residential mass timber market,” according to Yuichiro Shinohara, the President and CEO of Shinhohara Shoten. Responsible for fabricating at least 4,000 timber buildings every year, Shinohara Shoten is one of Japan’s top importers of softwood lumber.
Speaking to Wood Central last month, Mr Shinohara said that the company is using a range of European timbers in differential experimental timber systems: “This includes 8-storey all-timber buildings, which did not use any steel or concrete,” Mr Shinohara said, as well as “timber and concrete hybrid systems, which opens up a new market in the low-rise, high-volume construction.”
Will a rebounding yen help drive even more timber imports?
Shunichi Suzuki, Japan’s Finance Minister, said the country’s central bank is closely monitoring foreign exchange movements – amid hopes that the recent rebound in the yen will help reduce import costs.
“Foreign exchange movements have both positive and negative impacts (on the economy), but our biggest concern right now is their impact on import prices,” Minister Suzuki told Japanese media today. “We hope that import prices will cool down to certain levels if the yen’s weakness is reversed. Also, from this perspective, we’re closely monitoring markets.”
After languishing at 38-year lows below 160 per dollar for much of July, the yen staged a sharp rally in the days before and after the Bank of Japan’s decision on Wednesday to raise interest rates.
Minister Suzuki also reiterated that currencies must move in a stable manner, reflecting economic fundamentals and that Tokyo should act appropriately: “Excessive foreign exchange movements could increase uncertainties for corporate activities, therefore affecting people’s lives.”
- Please note: Yuichiro Shinohara will be a presenter at Timber Construct – Australia’s largest timber conference, later this month. To learn more about Shinohara Shoten and its role in driving timber construction in Japan and in the development of the Tokyo National Stadium, click on Wood Central’s special features.
