Japan Copper Scrap Price Plunges for Exporters

Japanese market price of copper scrap and mixed scrap plunges for exporters when Chinese buyers are away from the market due to plunging international copper ingot market and higher Chinese effective import tax. The scrap price for exporters could keep low level partly due to severer Chinese regulation for mixed scrap import while effective import tax will decrease in June.

Chinese buyers represent around 90% of Japanese copper scrap export. Chinese buyers reduced the bid widely in the month when international copper ingot price decreased since late April. Chinese buyers are reluctant to purchase now to avoid potential risk for further price down.

Japanese exporters pay 320-340 yen per kilogram for major export scrap item of mixed brass with bronze and water tapping fittings. The price is more than 20% or around 100 yen lower than 420-440 yen level in mid-April.

An exporter said they cannot find the price for mixed electric wire scrap when the buyers at major mixed electric wire scrap importing port in Tianjin hold the order. Tianjin custom service office increased the tariff standard price for scrap, which is base for 17% of value added tax, in May based on higher market price in April while international copper market already decreased.

The tax is estimated to increase by around 20,000 yen per container cargo and the higher burden cooled the Chinese buyers’ appetite. Japanese exporters pay 230-240 yen per kilogram for mixed electric wire scrap, which contains around 40-42% of copper, and the price is 40-50 yen lower than early April level. An exporter said without order, the traders cannot buy even at 220 yen.

The exporters decrease the purchase price of industrial mixed scrap containing steel, nonferrous metals and plastics to 40-45 yen per kilogram from 50-55 yen in early April.

With recent lower international copper ingot market, Chinese custom offices will decrease the tax standard price for scrap import in June. Chinese buyers could increase the order if the international market would hit bottom and the tax burden would decrease. However, the transaction could decrease when Chinese government prohibits the mixed scrap import in June. Japanese scrap price for exporters could keep low level for a while.