Japan Copper Buyers Secure Immediate Required Cu

Japanese major copper users including electric wire makers and rolled copper makers secure the required copper materials through summer. They secured by increasing purchase from long term contract suppliers and from spot market when Mitsubishi Materials’ Onahama smelter in Fukushima and Pan Pacific Copper’s Hitachi smelter in Ibraki stopped the operation since the major earthquake. The users are still cautious on the availability after summer depending on the smelters’ situation.

The quake stopped 30% of annual 1.7 million tonnes of domestic copper smelting capacity. Especially, Onahama smelter with annual 260,000 tonnes of production is the largest plant in eastern Japan. The users of Onahama tried to secure the alternative metals since the quake. A source in major electric wire maker said the firm secured immediate required copper by increasing purchase from long term suppliers and from spot market.

A source in other electric wire maker said the firm secured copper in March through summer. The firm purchased offshore metal at spot basis in the next week of the quake. Japanese smelters also try to keep the commitment by purchasing copper from third parties.

The copper users see the situation is too uncertain to secure copper for operation after summer. An electric wire maker, which purchases copper from western Japan, said the firm can keep the operation with the contracted copper but the firm eyes potential spot purchase depending on the rebuilding demand.

Pan Pacific Copper restarts copper making operation at Hitachi on Tuesday while Onahama smelter tries to restart a part of the operation in mid-July. Depending on the smelters’ operation, the buyers would have to seek alternative source after summer.

Pan Pacific Copper revised the copper output plan upward to 59,000 tonnes at Hitachi plant for first half of fiscal 2011 started April compared with original 53,430 tonnes due to the earlier restart. The firm tries to meet the demand by increasing the output to 263,064 tonnes for all company in the first half, which is 2.2% higher than previous announcement.