Japan Copper Tube Wholesalers Achieve Rolling Charge Hike by 30-50 Yen/kg

Japanese copper alloy product wholesalers almost seem to have achieved rolling charge hike of copper tube by 30-50 yen per kilogram. Major wholesalers have launched price hike announcement since September. The hike was almost approved when electrolytic copper market price, the main price indicator for copper tube, slipped down. Japanese major copper tube makers now start price hike announcement against contract users to follow successful penetration among wholesalers.

Copper tube makers had implemented rolling charge hike against wholesalers and wholesalers started reselling price hike announcement by maximum 50 yen per kg on and after September 1 to cover cost price upsurge. Air conditioner makers, the main users of copper tube, enter output reductions in September of usual years. However, this year, copper tube makers held order backlogs and domestic copper tube supply maintained tight as of early September. Thus wholesalers’ price hike offers were approved by 50% of the users in mid September and by 90% of the users in mid October.

Another supportive factor was steep decrease of electrolytic copper market price. Copper tube’s reselling price is majorly decided along with previous-month average of domestic indicator (JX Nippon Mining & Metals’ ingot price). The monthly average dropped by 50,000 yen per tonne for August-September and by 70,000 yen for September-October. Wholesalers could put rolling charge hike on the reselling price without actual price upsurge.

Now copper tube makers are likely to launch rolling charge hike offers against contract users, such as air conditioner makers, though the hike range would be narrower than the hike against wholesalers. Price negotiations might become hard when demand season of air conditioners has ended this year and copper tube supply is gradually easing in October.