Japanese Brass Bar Makers Slow Scrap Purchase

Japanese brass bar makers recently slow down procurement of copper and brass scrap. The makers had aggressively increased spot purchase of copper and brass scrap even adding premium due to long-time scrap shortage in the market. However, some makers seem to refrain from high price since late August.

Japanese brass bar makers’ production bottomed out in March 2009. Their operations are currently 90% or more. Along the makers’ output increase, scrap supply became chronically short. Brass bar makers purchase materials from scrap dealers by seasonal quota and cover material shortage by spot procurement. For spot purchasing, the makers had added premium and set no volume regulation.

However, a scrap dealer around Tokyo said there is no spot purchasing by several brass bar makers since late August. A major brass bar maker source commented material shortage is recently easing from previous serious shortage for late months.

One background seems that many makers continued regular material procurement during July-August though when makers decrease the procurement in usual years due to seasonal maintenance. On the other hand, some sources point out another factor that brass bar makers have increased electrolytic copper consumption since June 2010 to cover scrap shortage.

Scrap generation keeps stagnant for brass turning scrap and middle grade copper scrap, main materials for brass bar. Supply and demand balance is still tight. Scrap generation is unlikely to increase for a while.