Japan Copper Scrap Export Market Weakens in Both Price and Volume

Jun.11,2012 - JMB-PLUS, Nonferrous metal

Japanese copper scrap export market is deteriorating. The orders are decreasing from China, the largest importer of Japanese copper scrap, due to slowdown of Chinese economy and downtrend of electrolytic copper market price. Japanese exporters are reducing the offer prices. Japanese copper scrap dealers are suffered from inventory evaluation loss caused by current price down of electrolytic copper. The dealers cannot accept cheap price export. Thus the shipment volume is also decreasing.

Electrolytic copper spot price at London Metal Exchange dropped by more than US$ 1,000 per tonne from US$ 8,500-8,600 in early May. Chinese scrap importers are cautious to conclude new contracts when electrolytic copper market is weakening. In addition, copper scrap consumption decreases due to seasonal factors in China in summer when scrap users shorten their plant operating time. Japanese major scrap exporters see the demand would not recover for the next few months.

Scrap exporters around Tokyo presently pay 340-350 yen per kilogram for non-shredded brass based mix scrap, with relatively less iron and stainless steel. The price was 360-370 yen until late May. The purchase price also decreased to 200-210 yen per kg for thin electric wire scrap with insulator (containing copper at 41-42%) from 210-220 yen until late May.

Copper scrap supply slows from demolition works or manufacturers in Japan under weak economy. JX Nippon Mining & Metals revised down its electrolytic copper ingot price, the domestic indicator for copper scrap market, to 640,000 yen per tonne on June 8. The price was 710,000 yen on May 1. Japanese copper scrap dealers are suffering inventory evaluation loss and unwilling to approve low price offers. Thus copper scrap supply is tightening.

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