Slow Japan Low Grade Copper Scrap Export

Japanese copper scrap export is slow especially for products with limited economically treatment ability in domestic facilities including mixed electric wire and brass when the largest buyer of Chinese importers hold the order since April. Chinese buyers are apparently reluctant to buy Japanese scrap due to strict regulation for environmental issue and tax by Chinese government and price gap between China and Japan. Japanese scrap export is expected to take more time to recover. The slower demand could result in higher excess domestic inventory and lower domestic market price. Japanese scrap dealers tend to export such copper scrap with smaller copper content and less profitable treatment business tend, mainly for China. However, Chinese buyers are reluctant to buy such lower grade scrap while Chinese buyers have still strong appetite for ferrous scrap based mixed scrap. Japanese exporter source said Chinese government’s strict regulation to scrap dealers reduces the scrap import by China. China tries to stop dealers’ environmental pollution and tax evasion since last year. Chinese small scrap dealers without treatment facility cannot burn scrap as before and decrease the treatment volume while some dealers with tax evasion suspicion are forced to stop the operation. Japanese sources said the higher price of Japanese scrap than Chinese market also reduces Chinese import. With higher yen rate, Chinese buyers’ profitability gets worse for the dollar based transaction due to higher yen rate since March.