Tough year even for non-ferrous scrap industry

2015/11/14


photogThis year was tough. Ifd like the situation to be calm down, but I donft think we can rest. Honestly, Ifm still feeling fear,h said a medium-sized non-ferrous scrap dealer. The dealer trades 800 tons of non-ferrous scrap such as copper scraps and aluminum scraps per month. He said that the collection dropped by 20-30 percent compared to the previous year. This year, the decline of iron made us feel that we were in a historical turning point. But, at the same time, this year was a tough year for non-ferrous scrap business.



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Both new machiningline scrap and demolition have declined. Due to the overall slowdown of scrap supply caused by price drops, the dealer has cut a loss after a loss for this year and has been eager to lower the stock unit price. Even so, the dealer has still have remaining scrap failing to sell off. This is not a special case, but we can find such cases here and there.

However, when the price drops become final and binding, consumer appetites might decline in the market. Even if the selling price were lowered, there would often be no gconsumersh to sell to. We can say the aluminum cans, king of surplus, would be the most difficult item to sell in the non-ferrous scrap category.

Even wholesalers trading only aluminum UBC
A wholesaler trading only aluminum UBCs said, gWefve recently received a significant number of selling offers, but itfs difficult to purchase with the current weak outlook for the future. The highest price would be JPY115/kg ex yard. Or, we would like to avoid trading orders with a substantial quantity.h

Copper scrap market has also drastically changed from the last year.

Firstly, purchasing at a higher price has not been seen recently. In a sense, the prices settled at a level where medium-sized dealers afforded to buy.

In Kanto region, the high priced collection of a copper alloy manufacturer, K company located in the Sea of Japan side, which had raised the market price level, has gone away. It is considered to have reduced the long-term contract with refined manufacturers.

In addition, manufacturers' buying has slowed since October.

The prices of standard copper which are popular among non-ferrous smelters had unnecessarily risen with a kind of inflationary situation from June to September this year, but the non-ferrous smelters has lost their fascination rapidly since October.

It might be partly because of the increased imported materials caused by the little domestic generation of scrap, and partly because the increased supply brought by the decreased export for China.
The import of copper scrap was 125,671 tons from January to September this year. It was almost same as the same period of last year, which was 124,956 tons.

(The transition of imported copper scraps *Total amount of copper scrap, brass scrap and copper alloy scrap)
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Domestic copper smelters might reduce production after the TC/RC (Treatment Charge/Refining Charge) might drop next year.
If the TC/RC rises, smelters increase production even if the demand decreases all over the world. And, if the TC/RC drops, they reduce production even if the demand is steady. But, in many cases, the global demands are consistent with the rise or drop of the TC/RC.

If the global economy remains sluggish, Chinese economy deteriorates further, China doesnft buy and Japanese domestic market doesnft much, the industry sentiment will sink further.


iEdited by Sasakij

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