Japan Cu Smelters and Fabricators Increase Import Scrap Utilization

Japanese copper smelters and copper alloy product makers are increasing utilization of imported copper scrap. They need to procure imported scrap even at expensive cost with high freight when domestic scrap generation maintains stagnant due to inactive economy. Meanwhile, scrap generation is also decreasing in USA, the main supply source of copper scrap to Japan. Japanese trade statistics suggest copper scrap export is currently increasing from Middle East and Europe.

Copper smelters use copper scrap to control melting furnaces’ temperature. Domestic smelters are increasing procurement of imported copper scrap even adding premiums to cover material shortage. One major smelter said the utilization rate of imported copper scrap has currently risen to 30-35% though they had purchased scrap mostly from domestic market so far.

Some of copper alloy product makers are also accelerating copper scrap import, those who consume electrolytic copper ingot and copper scrap as main materials. However, a nonferrous metal trader said, they cannot contract US scrap despite of offers because scrap generation is stagnant also in USA. Alloy product makers are increasing electrolytic copper consumption to keep operations.

Japanese copper scrap import was 8,108 tonnes in May, according to Ministry of Finance. The volume exceeded averaged 5,000-7,000 tonnes per month in April-September 2008 before Lehman Shock. The import from USA was 1,148 tonnes in May and accounted for 14% in total import. The rate was 24-27% in April-September 2008.

On the other hand, the import from Middle East’s 5 countries was 1,773 tonnes in May, almost double of 500-1,000 tonnes per month in April-September 2008. The import from Europe’s 4 countries including UK was 1,071 tonnes in May, which reached 1,000 tonnes for the first time in 20 years.