Europe and Russia have steadily captured growing respective shares of the Japanese softwood lumber import market in 2022. North America’s presence in Japan, meanwhile, has sustained a constant fade.
Year-to-date Japanese imports from Europe reached 2.13 million cubic meters through the third quarter, up 33% compared to the volume through the first nine months of 2021. Russian exports to Japan jumped 87% compared to a year ago through September, reaching 684,896 cubic meters.
The hikes in imports from Europe and Russia have offset declines in shipments from Canada, which plunged 20% through September to 762,880 cubic meters. Imports from the US slipped 3%. Europe accounted for 51% of total Japanese imports through the third quarter, up from 45% through September 2021. Russia’s market share has increased to 16% this year compared to 10% a year earlier. Canada’s share of the Japanese import market fell to 18%, down from 27% through September 2021.
Total Japanese imports reached 4.2 million cubic meters through the third quarter, up 18% from the year-ago pace. However, imports have declined gradually as the year has progressed after peaking in the first quarter (see chart).
First-quarter imports surged to 1.48 million cubic meters, up 35% compared to the 2021 volume through March. Shipments slipped to 1.37 million cubic meters and 1.33 million cubic meters in the second and third quarters, respectively.
Europe is the only major supplier to increase exports to Japan in the third quarter. Shipments from that region reached 735,692 cubic meters in the third quarter, up 12% compared to the second quarter and roughly on par with the first-quarter volume.
Ailing economic conditions throughout Europe have weighed heavily on softwood lumber demand in that region.
The lack of domestic sales has prompted European producers to intensify efforts to ship into overseas markets. Japan, China, North Africa, and the US have been primary targets.
European producers have offered rising volumes of J-grade dimension lumber in Japan at substantial discounts to Western S-P-F J-grade from Canada in recent months. The lower prices have helped European suppliers capture a larger share of the Japanese J-grade market, especially in the second half.
Heavy volumes of Russian beam stock have contributed significantly to historically high inventories of unsold lumber at the Tokyo lumber terminal in recent months. Observers frequently associate shifts in trade with Russia to that country’s invasion of Ukraine in late February.
Many countries, including the US and much of Europe, imposed extensive economic sanctions on Russia in response to the invasion. It is unclear how extensively the Ukraine war — and the world’s reaction to it — has impacted Russian trade with Japan.
Russian exports to Japan peaked in the first quarter at 264,923 cubic meters, more than double the year-ago pace through March. Shipments from Russia declined in both the second and third quarters, following the same pattern as overall Japanese imports.
Imports of lumber used in traditional post & beam housing are expected to remain dormant for the balance of 2022 and early 2023 as buyers work through heavy inventories at ports and distribution yards. That trend likely contributed to a slowdown in third-quarter shipments compared to volumes evident earlier in the year.