Weakening Demand for Cu and Al Scrap around Tokyo

Brass bar makers around Tokyo are decreasing the purchasing volume of brass scrap. In the latest price negotiations between brass bar makers and scrap dealers, some makers offered the volume cut by more than 30% compared with the usual level. The makers’ scrap procurement is likely to decrease by average 10-30% against the usual volume around Tokyo.Domestic brass bar production was very active during February-April when the market price was in uptrend. The monthly output approached 20,000 tonnes during the 3 months, recovering the level as high as in 2007. However, the actual demand hasn’t recovered from water taps and gas appliances. The production dropped again in May.Some brass bar makers around Tokyo have decreased the procurement volume of brass scrap since mid May. The movement spread in June. One maker said they should cut the purchasing volume by more than 30% from the usual level with less brass bar orders. Another maker offered the volume cut by 50% against a scrap dealer in the latest price negotiation.Supply and demand balance of high grade aluminium scrap is also easing around Tokyo. Aluminium re-rollers are decreasing scrap procurement. At the same time, demand for secondary aluminium alloy is weakening whose main material is aluminium scrap.Aluminium scrap generation is gradually increasing toward summer. On the other hand, aluminium re-rollers are decreasing scrap procurement when their production of construction materials is stagnant and they prefer primary aluminium ingot which is cheaper than high grade alminium scrap.As to secondary aluminium alloy, a major alloy maker continues output reduction for automakers by 10% since auto sales are declining mainly in North America. Domestic alloy production is also impacted by the increase of alloy export from South Korea and China since April.