Japanese Cu Alloy Fabricators Suffered from Serious Scrap Shortage

Japanese copper alloy product makers are seriously suffered from copper scrap shortage. Copper scrap generation keeps very low in domestic market while copper scrap dealers tend to hold inventories since electrolytic copper market price continued to drop. Most copper alloy fabricators forecast their production level keep the current steady level for July-September. Scrap supply would tighten more.

Copper scrap generation maintains inactive due to low operations of small-size metal manufacturers and decreasing number of building demolitions. In addition, Nippon Mining & Metals’ electrolytic copper ingot selling price, the domestic market indicator, has declined by 190,000 yen per tonne or 24% from 790,000 yen in mid April. Scrap processors and dealers are recently negative to ship high-price inventories.

Material shortage is most serious at brass bar makers since most of the materials are consisted of brass turning scrap and middle-grade copper scrap. Japanese brass bar production currently recovered to above 16,000 tonnes per month from below 10,000 tonnes per month in March 2009.

Copper foil makers are also concerned about scrap shortage for July-September outputs. Major copper foil makers around Tokyo are offering scrap volume as much as in April-June against copper nugget processors and scrap dealers. However, scrap suppliers are cautious to conclude the contracts when generation of electric wire scrap maintains stagnant.

Many scrap dealers examine to decrease quarterly contract volume for copper alloy product makers for July-September. They are negative to contract delivery quotas since scrap generation is unlikely to upturn in a short term.