Plywood prices recovering?

Recently, there was a report in the Edge Daily that plywood prices have rebounded after dropping for much of 2007 (go here). That article quoted a recent Credit Suisse research report, which notes: "Plywood prices have bottomed out and are beginning to pick up. We expect this good news to trigger a sector re-rating, especially since share prices have collapsed." Could this be the reason why Ta Ann's share price has been firming up (see my earlier post). However, the same share price recovery was not observed for other timber stocks, such as Lingui, JTiasa & Subur.

I have just received the latest ITTO report for March 2008 (an extract is tabulated below). From this table, we can see that there is some improvement in the prices of particleboards & MDF, while some sawnwood prices are still sliding. The prices of plywood and logs remained unchanged.


Source: The ITTO Tropical Timber Market Reports

Based on the above, it is still too early to call a Buy on the Timber sector, with a possible exception of Ta Ann. The improved prices for particleboards & MDF could be good news for Evergreen.