n° 167 – July 2020

Japan has struggled to restore normal industrial activity amid fears of a renewed hike in COVID-19 infections. In the automotive sector, for example, Toyota’s domestic operations have recovered to 90% of the norm in July but others are way short of this figure. 

Incentivized by higher LME prices, long-held inventories have been emerging on to the market. While No.2 Copper has been well absorbed by domestic and Chinese smelters, No.1 Copper has been losing its way owing to the slump in demand from rolling mills and casters.

There is strong competition for cables and motors, pushing the local market to unreasonably high levels; processors are said to be buying solely for the purpose of maintaining their operations without paying much heed to profitability.

Acceleration of aluminium scrap prices in response to higher LME numbers has made the material more expensive than on the international market, thus hindering exports. Domestic alloy production is 30-40% lower on a year-on-year basis.

Although more stainless steel scrap is coming on to the market thanks to higher LME levels, it is difficult to find good outlets owing to cutbacks by domestic mills. The dependency on exports has been intensified.