To meet the higher wood fiber needs, domestic fiber sourcing from the domestic sawmills has increased by 2% and import volumes have gone up 9% year-to-date. In the 2Q 2014, importation of softwood and hardwood chips was up by as much as 17% and 14%, respectively, as compared to the same quarter last year.
Despite the substantial increase in import volumes, average prices for imported hardwood chip prices in Japan declined by about 17 dollar per odmt from 2Q 2013 to 2Q 2014, as reported in the latest Wood Resource Quarterly (WRQ). Average prices for softwood chips were one dollar higher in the 2Q 2014 as compared to the same quarter in 2013, but as much as 13 dollars higher than in the first quarter this year.
The general trend the past four years has been that prices for imported chips have gone up in the local currency due to a weakening Yen against the US dollar, and that prices for domestically sourced chips have fallen slightly. In the 2Q 2014, prices for imported softwood chips were on average 65% higher than residual chips from domestic sawmills, while imported hardwood chips were just over 20% higher than locally sourced hardwood chips, as reported in the WRQ.
The biggest change in fiber sourcing this year has been a sharp increase in softwood chip imports from the US and record high import volumes of hardwood chips from Vietnam. Other developments include higher volumes imported from South Africa, Brazil and Indonesia, while shipments of hardwood chips from Chile and Australia have continued to decline in 2014. With the recent pick-up in hardwood fiber imports to Japan, the total import volume for this year could very well reach its highest level in six years.
