Japanese Cu Scrap Export Price Weakens with Chinese Slow Demand

Japanese copper scrap export price is likely to maintain weak for several months. China, the main importer of Japanese copper scrap, is currently shrinking the procurement and the market price turned downward in late April. Chinese importers seem to hold surplus scrap inventories due to recent speculative purchasing.

About 90% of Japanese copper scrap export is bound for China. Japanese copper scrap export has increased since the beginning of this year. According to the statistics by Ministry of Finance, the export was 36,809 tonnes in March, which recovered the level as high as September 2008, before the global economy deterioration.

However, Chinese importers offered wide price cut for Japanese copper scrap around 20 April. Japanese scrap exporters are currently purchasing brass based mix scrap, one of major exporting items, at around 270 yen per kilogram, which was above 350 yen in mid April.

Japanese copper scrap was undervalued when copper metal price was higher at Shanghai Futures Exchange (SHFE) than at London Metal Exchange (LME). Now the price gap narrowed between SHFE and LME. A Japanese scrap exporter points out Chinese importers’ strong purchasing by April was speculation and the inventories haven’t reached the actual consumers.