Tight Supply Supports Japan Copper Scrap Price

Japanese copper scrap market price is hitting bottom recently. The dealers try to secure the materials under tight supply when the buyers including rolled copper makers increase the purchase volume.

Japanese official copper ingot price decreased by 10,000 yen to 780,000 yen per tonne on Friday. Nippon Shindo and Mitsubishi Shindoh reduced the brass turning scrap purchase price by 4 yen to 526 yen per kilogram for scrap with 0.8% oil and water content and 120 days note transaction while official zinc ingot price increased by 5,000 yen to 270,000 yen on Thursday.

Usually, the lower copper price encourages the dealers to reduce scrap purchase price. However, the dealers still keep the purchase price under the tight supply. The dealers cannot purchase No.1 copper wire scrap at less than 700 yen per kg, which is the theoretical price, while the dealers reject more than 720 yen transaction.

A dealer said the company pays more than 710 yen per kg to secure the supply commitment to the buyers for April. The dealers with enough inventory expect the price decreases to 685-690 yen level but the actual transaction price is around 700 yen.

Brass scrap price is also relative high. The dealers get strong order from rolled copper makers. The dealers are busy to meet the higher demand from the buyers. A dealer said the makers notice the intention for regular volume 3 times purchase in May. With the firm demand, the scrap transaction price is firm under tight supply.

Brass bar turning scrap market price is 480-495 yen per kg but large lot transaction price is near 500 yen. New cutting brass scrap price increases to 90-91% of theoretical brass price under the current official copper and zinc price from former 88%.

International nonferrous metal market plunged in late last week. Based on the price, Japanese official copper price could decrease by 20,000 yen per tonne additionally. The dealers hold the scrap purchase to wait the next move but the scrap price would keep relative high level under the tight supply.