China Buyers Lift Japan Copper Scrap Market

Higher export price lifts Japanese copper scrap market price. The exporters pay around 395 yen per kilogram for brass scrap with bronze scrap and small portion of ferrous scrap recently, which is around 10 yen higher than December level. Chinese buyers increase the import price with expectation for higher price when copper ingot market keeps high level. However, the price increase is expected to be limited due to marginal demand growth.

The exporters pay as high as more than 400 yen per kg for brass scrap with bronze scrap and small portion of ferrous scrap while the price was less than 385 yen in December. The purchase price is around 270 yen for electric wire scrap with 43-45% copper while the price was around 260 yen in December. However, the price increase is limited for lower grade copper scrap with less than 40% copper.

Japanese largest copper scrap buyer of China, which represents 90% of Japanese export, reduced the scrap purchase in late 2010 due to limited power supply and financial squeeze. Despite of record high copper ingot price at London Metal Exchange, the scrap export price to China kept lower level since last summer.

The scrap export price increases in January. A source in major Japanese scrap exporter said Chinese scrap dealers can restart the purchase after they reduced the scrap inventory. Chinese buyers apparently try to secure scrap before the price increase when they expect higher copper ingot price in February.

However, Chinese actual demand growth could be limited due to financial squeeze and limited power supply. An exporter source in Tokyo said the scrap export volume and price is relative lower than 2009 level.