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Japan

The number of COVID cases has remained surprisingly low. Instead, however, Japan has been facing inflation for the first time in decades. Wages have remained low whereas commodity prices have been increasing. Meanwhile, confusion surrounding logistics has been damaging not only industries such as automotive and semiconductor but also consumer goods.

An increasing number of companies has started acting on the carbon footprint issue while the shift to electric vehicles has been somewhat delayed in Japan where major car manufacturers are cautious about taking drastic action.

Copper exports hit the bottom in August but increased by 29% in September, largely for China, thus making the local market very tight. Some scrap dealers are claiming that their volumes have fallen by 30% recently. Exports are thought likely to increase more in October and November when two domestic smelters close for planned maintenance. Meanwhile, exports to Malaysia have been falling from around 15,000 tonnes to nearer 5000 tonnes on fears of tightened import rules.

Supported by demand for stockpiling from auto parts manufacturers, production at domestic rolling mills has remained at around 65,000 tonnes per month despite the shortage of local scrap.

For aluminium, the prolonged scrap market tightness has swung to a slight oversupply following the sharp fall in the LME price triggered by cutbacks in automotive production and hesitant sourcing by exporters.

Well-supplied local aluminium alloy producers foresee stronger demand for the first quarter of 2022 upon a recovery in domestic automotive production.

In a tight stainless steel market, there has been strong competition between domestic mills and exporters. India has joined South Korea, China, Taiwan and Indonesia in the fight for material. More than 60% of the scrap imported into China in the first nine months of this year was shipped from Japan.