Low Grade Cu Scrap to Get Oversupply in Tokyo

Japanese low grade copper scrap demand decreases sharply for smelters when major smelters in eastern Japan stopped the operation after the major earthquake. The traders and dealers try to shift the shipment to smelters in western areas. However, the shift is limited. The scrap supply could be oversupply mainly around Tokyo area.

Copper smelters use the low grade scrap to adjust the temperature of the furnace. Onahama Smelting and Refining in Fukushima stopped the operation and scrap purchase. Japanese largest copper smelter, Pan Pacific Copper is expected to reduce the scrap purchase at Saganoseki smelter in Oita and Tamano smelter in Okayama when the firm stopped the operation at Hitachi plant in Ibaraki.

Mitsubishi Materials, which has majority of Onahama Smelting and Refining, apparently asks to the scrap suppliers for scrap shipment diversion to Naoshima smelter in Kagawa. However, a dealer said Naoshima smelters cannot accept all of the scrap for Onahama.

The scrap dealers try to ship scrap to other smelters. However, Sumitomo Metal Mining’s Toyo smelter in Ehime already secured the required scrap with limited room for additional purchase, according to a dealer. Pan Pacific Copper plans to restart Hitachi plant in April while Onahama smelter has no immediate plan to restart.

Japanese smelters would reduce the scrap purchase price in April under the market condition. The reduction is expected to be up to 20,000 yen per tonne. The domestic market trend would pressure on the scrap market price.