Weak Copper Ingot Price Impacts Japanese Scrap Export Price

Nippon Mining & Metals announced on Tuesday the firm revised down the electrolytic copper ingot selling price, the market indicator, by 40,000 yen to 600,000 yen per tonne for domestic shipment in June. The firm additionally lowered the price after previous down revision by 30,000 yen on Friday. The latest price hit the lowest since mid October of 2009. The monthly average would be 613,100 yen without any more revision within June. Along the market indicator’s decline, copper scrap export price is rapidly lowering.

The latest revision reflected weak offshore copper market and strong yen trend. Copper settlement at London Metal Exchange was US$ 6,157 per tonne on June 7, down by US$ 463 from the settlement along which Nippon Mining & Metals previously revised the ingot selling price. Telegraphic transfer selling rate was 92.62 yen per US dollar on Tuesday, stronger by about 1 yen than Nippon Mining & Metals’ previous price revision day.

Japanese copper scrap export price has recently dropped down due to excess inventories at Chinese scrap processors and sharp downturn of electrolytic copper market. Japanese exporters presently purchase mixed metal scrap, excluding shredder dust, at 35-40 yen per kilogram though the price kept above 40 yen until the end of May. The price has downed by total 20 yen in late 2 months. The purchase price is around 190-210 yen per kg for thin electric wire scrap with insulator (containing copper at 43%). The price represents below 200 yen in several cases.

China’s demand for Japanese copper and mixed metal scrap maintains stagnant after Chinese New Year Holidays in February. China accounts for 90% in Japanese total export of copper and mixed metal scrap. The demand is especially weakening for mixed metal scrap. Chinese scrap processors hold large inventories since ferrous scrap market price lowered in the country and scrap processors’ profitability worsened.