Japan Rolled Copper Makers to Reduce Scrap Purchase Price, Volume

Japanese rolled copper makers are expected to reduce copper scrap price and purchase volume for high graced scrap through long term contract with scrap dealers for January-March. The makers will reduce the scrap purchase volume when the order for rolled copper is uncertain for early 2010 while the rolled copper demand was firm in October-December. The copper scrap price and demand will keep the current level for low grade scrap for smelters.

Under recovering automobile demand, copper sheet and strip makers around Tokyo got order in October-December at around 90% of the level before financial crisis. The rolled copper makers increased the purchase volume of high grade copper scrap including no.1 copper wire scrap and new cutting scrap. However, they are expected to reduce the purchase volume for no.1 copper wire scrap by 10-20% in January-March from current level. The purchase price is likely to decrease by around 5,000 yen per tonne.

A major copper foil maker around Tokyo reduced the no.1 copper scrap purchase volume by 30-50% in November-December from September-October when the users of electronics makers reduce the operation after special demand for Christmas season. A scrap dealer said the makers said the purchase volume will decrease by 50% more in and after January. The scrap price for foil makers, which is usually higher than the price for sheet and strip makers, is same level in January as price for sheet and strip makers.

Another foil maker also reduces the purchase price and volume for electric wire nugget. The firm pays premium on copper market price at London Metal Exchange but the firm reduces the premium by around 5,000 yen per tonne for January-March from October-December. The premium in January-March is almost half of July-September level after around 5,000 yen down in October-December.

Copper smelters’ demand is firm for low grade scrap, which is used to adjust furnace temperature. The demand and price in January-March will be same as current level. A scrap dealer expects middle grade copper scrap price is likely to keep the level with support by low grade scrap demand.