Japan Cu Smelters to Keep Domestic Supply for F2012

Japanese major copper smelters including Pan Pacific Copper, Sumitomo Metal Mining and Mitsubishi Materials concluded supply negotiation with domestic users for shipment in fiscal 2012 starting April. The supply volume is almost same as fiscal 2011 except for some contracts. The domestic demand would be in line with fiscal 2011 level due to rebuilding activity for damaged areas by the major earthquake while the basic demand decreases due to offshore shift by the users.

Japanese copper ingot demand decreased by 4% to around 1.06 million tonnes in 2011 from 2010, according to Ministry of Economy, Trade and Industry. Pan Pacific Copper expects the demand would be 1.05 million tonnes level in 2012. The demand decreases despite of onetime demand for the rebuilding activity when the users shift the operation to offshore sites under high yen rate.

Pan Pacific Copper and Mitsubishi Materials agreed with the domestic buyers to supply same volume of ingot for fiscal 2012 when the buyers are reluctant to increase the purchase volume. Sumitomo Metal Mining increases the supply due to major production cut in fiscal 2011 during 2-month maintenance outage.

Their premium is based on Japan premium by Corporacion Nacional del Cobre de Chile (CODELCO), which already set the premium at US$ 93 per tonne for 2012 shipment compared with US$ 98 for 2011 shipment. Japanese smelters also reduced the premium by around US$ 5 for fiscal 2012 shipment.