Mitsui Sumitomo Metal Mining Brass & Copper to Average Scrap Buy Price

Mitsui Sumitomo Metal Mining Brass & Copper starts new copper and brass scrap purchase pricing at Ageo plant in Saitama in April. The pricing is based on averaged Japanese official copper ingot price compared with traditional real time official price. The firm tries to minimize the purchase price change for simple management.

The firm offered the new system last year and is changing the system step by step, according to the scrap dealers. The firm basically sets the selling price of the products based on averaged official copper ingot price in previous month. The firm applies the scheme to scrap purchase.

The firm still studies the system including term of the average price. A scrap dealer said the firm and scrap dealers try to find the compromising conditions. The dealer said the firm could set the scrap price for first half of each month based on previous month average price and the price for second half of each month based on the month average.

Some of the dealers anticipate the pricing could bring disadvantage for the dealers when the dealers purchase scrap at real time market price. A dealer said the dealers could purchase scrap only when copper price is high under low level scrap supply. The pricing could squeeze the dealers’ profitability.