Plumbing Copper Tube Returns to Previous Fixed Price System

Price mechanism is reviewed again for in-house plumbing copper tube between Japanese copper tube makers and general contractors. The price system was changed in June 2006 to reflect copper metal price fluctuation more timely though plumbing copper tube price was fixed previously. However, general contractors are offering the fixed price system again when copper metal price continued uptrend since March 2007. Materials for large-sized buildings usually take several months or years from the contracts to the actual shipment. Under the price mechanism to reflect copper metal price automatically, general contractors’ copper tube purchasing price differs widely from the originally estimate.A concerned source said the price mechanism for plumbing copper tube has partly returned to the previous fixed system since August 2007. The system review is mainly for large-size building projects.Copper tube price is changed along the new price mechanism if Japanese official copper ingot price fluctuates during the term from the estimate to the actual shipment. The official copper ingot price almost kept increasing since March 2007 and plumbing copper tube prices became higher than originally estimated. General contractors, the end users of plumbing copper tube, showed disapprovals on the price gap. Copper tube suppliers are facing difficulty to keep the new price mechanism. Sales competition with resin tubes also impacted copper tube suppliers.Another factor is that new housing starts decreased in Japan after June 2007 when Japanese building standard law was revised. Plumbing copper tube supply became surplus against the demand and the new price system became harder to be maintained.