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Currently, Japan is suffering from the third timber crisis, with unprecedented supply shortages and extremely high prices of timber. The reason is that the expansion of demand in the United States and China has pushed up the price of wood products. Another reason is the shortage of containers, leading to delays in shipments.

The first timber crisis in Japan in the early 1990s was caused by environmental problems, and the prices of imported timber products soared. The second timber crisis occurred in 2006, mainly because Indonesia restricted timber logging at that time. 

At the moment, extreme supply shortages have exhausted the inventory of domestic distribution channels in Japan, and distributors are rushing to find alternative materials. The Japan Laminated Wood Manufacturers Association warned that because of high raw material prices and shortages of raw materials, manufacturers may have to reduce production by 20% after May. As one of the major laminated timber producers, Timberam has adopted a production reduction plan since April, reducing production by 25%.

In the second half of 2020, the timber market demand in China and the United States rebounded sharply, while the Japanese market was still dormant, so Japan’s purchasing power was relatively declining, leading to a shortage of wood raw materials.

In addition, the shortage of containers caused delays in shipments, which delayed supplier shipments and caused the Japanese market to run out of imported wood products. On the one hand, suppliers are reluctant to look for containers and ships and ship them to Japan; on the other hand, delayed shipments mean that the supplier’s order balance has increased, causing the supplier to reduce new quotations.

In short, the world economy seems to have stagnated due to the coronavirus pandemic in 2020, but China has successfully contained the spread of the new coronavirus and the economy has recovered substantially in the second half of the year. The U.S. record-breaking low mortgage interest rates and lockdowns have stimulated the skyrocketing housing market and timber market.

In contrast, Japan’s economic recovery is clearly lagging behind. After January 2021, not only the prices of wood and its products in North America and Europe, but also the prices of logs and wood products in Russia, New Zealand and Chile have also risen sharply.

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