Japanese brass bar distributors and processors increase interest in cheaper South Koran materials. The buyers especially around Osaka could import South Korean materials for cost advantage.
South Korean brass bar export increases recent years. The export increased by 6% to around 54,300 tonnes in 2011 from 2010, according to Japan External Trade Organization (JETRO). The export volume was 2 times of Japanese export. China and USA represented more than half of the South Korean export. South Korean brass bar export was near 3,000 tonnes for Japan in 2011, which represented more than 1% of Japanese production. Japanese buyers didn’t increase the import when domestic brass bar makers reject the turning scrap purchase from processor due to quality issue. The processors have to sell the scrap at lower price to smelters and export market. The turning scrap represents 60-70% of brass bar. However, domestic brass bar makers purchase the scrap at more than 60% of brass bar price. The recycling scheme prevents the buyers to use import materials. However, brass scrap got oversupply since late 2011 due to very slow domestic brass bar demand. The turning scrap price decreased and the domestic sellers increased the export. The brass bar buyers lose the cost merit from domestic brass bar and South Korean materials increase the presence. A brass bar distributor said the firm started to study potential import when a major buyer is willing to accept import. The distributor could start import if South Korean makers accept brass bar turning scrap at certain condition.