Japan Copper Demand to Recover 1 Million T in 2010

Japanese copper demand in 2010 would reach 1 million tonnes for the first time in 2 years. The demand in 2009 decreased to less than 1 million tonnes for the first time in 34 years due to very slow demand after Lehman shock. Japanese copper smelters now expect the demand could reach near 1.05 million tonnes in 2010 with higher demand for automobile and appliances while the demand was expected to be 950,000 tonnes level as of the beginning of the year.

A major copper smelter source said the domestic order receipt is more than expected in October and November. The source said the automobile demand is still strong while the demand was expected to decrease after end of subsidy for the eco-friendly vehicle purchase.

Japanese government decided to halve subsidy for eco-friendly appliances purchase in January 2011. Consumers try to take the chance for the subsidy by end of 2010 increasing the demand. Japanese appliances makers keep full capacity operation lifting the copper demand.

Japanese copper demand was 726,000 tonnes in January-August or annualized 1.09 million tonnes. The demand in 2010 could reach 1.05 million tonnes even with slowing demand and seasonal slowdown in yearend holiday.

The demand decreased by 26% to 908,000 tonnes in 2009 from 2008. The demand decreased by 22% for electric wire and by 30% for rolled copper products when the users tried to reduce the inventory drastically.

Japanese copper smelters agreed the shipment with domestic users based on around 950,000 tonnes of domestic demand in 2010. However, the demand keeps annualized 100,000 tonnes higher level. The smelters try to meet the higher demand while they cannot get additional order from offshore buyers. With the limited supply capacity in Asian market, Asian copper premium keeps more than US$ 100 per tonne level.