Delayed Japan Copper Smelters’ Ingot Price Set with Domestic Buyers

Japanese copper smelters are still talking with Japanese users including electric wire and rolled copper makers for ingot price for fiscal 2009 starting April. The users cannot fix the purchase volume when the demand is uncertain due to inventory adjustment phase. They started the negotiation in January but they fail to offer premium and other condition while the negotiation was concluded with buyers in Taiwan and South Korea.

The negotiation is usually settled in December with offshore buyers and in January with domestic buyers. However, the negotiation was settled with offshore buyers in late January. After the settlement, the smelters started negotiation with domestic buyers but the talk is still in preliminary stage.

Major production cut by automobile and appliances results in major inventory adjustment for materials and parts. Some rolled copper makers idled the plant for half month in January and February. A copper smelter source said the domestic copper ingot demand is half of a year earlier level.

Copper ingot premium by Corporaci?n Nacional del Cobre de Chile (CODELCO) was settled at CIF US$ 65 per tonne for Japan for 2009, which is US$ 37 lower than previous year. Japanese smelters would follow the move. However, the smelters cannot offer the price when the users still study for purchase volume while the premiums was settled at around US$ 70 for China, US$ 64 for South Korea and US$ 65 for Taiwan.