Cu Fabricators Continue to Minimize Scrap Procurement, Tokyo

Japanese copper alloy fabricators are reducing copper scrap procurement more in February. A major sheet and strip maker around Tokyo halved copper scrap purchasing volume this month. Some brass bar makers around Tokyo cut down the numbers of price and volume negotiations with scrap dealers to decrease procurement volume.

Copper alloy fabricators and electric cable makers are forced to shrink their operations and outputs along economy recession. They reduced copper scrap purchasing volume by 30-50% for January-March from the previous quarter. Some of copper foil makers and phosphor bronze fabricators decided to cut scrap procurement by more than 80%.

A major sheet and strip maker around Tokyo announced to halve copper scrap purchasing volume in February though the maker had already halved the procurement in January. As a result, the maker’s scrap purchasing volume shrank by 70-80% compared with July-September 2008. Volume change was irregular because the usual contract period is 3 months. The maker currently holds copper scrap inventory as much as 4-month consumption due to worse order receipts.

Some brass bar makers around Tokyo reduced the number of price and volume talks with scrap dealers from usual 3 times a month to once in January. The makers already announced against scrap dealers to reduce the talks to once a month in February again in order to minimize scrap procurement.

Copper scrap supply and demand are balanced since scrap generation is decreasing along economy slowdown. Meanwhile, scrap dealers are concerned about business shrinkage with the demand stagnancy.