Procurement difficulties and higher purchase prices due to declining domestic scrap generation and tighter supply and demand
First written in FY2016. 5 of 14 entries say "Mitigated", first in FY2020-Q2. Latest entry: FY2025.
Merf moved to the "Worse" side of this theme in 2025, 4 years after the typical company in this theme (2021).
The whole theme swung hardest in 2025: 9 of 10 companies on the "Worse" side.
3 other companies' latest entry also says "Worsened".
- FY2025WorsenedAnnual report
「Although the supply environment became more difficult amid sharp daily price fluctuations, sales volume increased 17.8% year on year for ingots following the acquisition of the business of US ingot manufacturer California Metal-X, Inc. (CMX), while recycled raw-material sales volume declined 17.3%, resulting in an overall decline of 7.4%.」
While advancing measures including overseas procurement, the difficult supply environment caused by sharp price fluctuations appeared as a 17.3% decline in recycled raw-material sales volume and a 7.4% overall decline. - FY2024-Q3WorsenedAnnual report
「The Group increased procurement from overseas and expanded the range of items handled, including e-scrap. However, as the supply environment became more difficult with rising prices, sales volumes declined 14.1% year on year for ingots, 13.2% for recycled raw materials and 13.4% overall.」
Although the Group increased overseas procurement and expanded its handling of e-scrap, the supply environment became more difficult as copper prices rose, resulting in lower sales volumes. - FY2024-Q1MitigatedAnnual report
「Margins expanded as the average yen-denominated cash price of copper during the period remained 7.8% above the same quarter of the previous year, and as the Company promoted processing and sorting after reviewing the grades of procured recycled raw materials, among other factors,」
The Company states that margins expanded after reviewing the grades of procured recycled raw materials and advancing processing and sorting, among other measures, linking procurement and processing initiatives to improved profitability. - FY2023MaterialisedAnnual report
「Meanwhile, in the nonferrous metals business, gross profit declined because margins were squeezed as raw-material prices rose due to surging commodity, resource and energy prices following Russia's invasion of Ukraine, despite copper prices remaining firm at high levels from the beginning of the period.」
Higher raw-material prices resulting from surging resource and energy prices, among other factors, directly appeared as margin pressure and lower earnings in the nonferrous metals business. - FY2023-Q2MaterialisedAnnual report
「Although the average yen-denominated cash copper price during the period rose 4.2% year on year, trading margins narrowed due to the impact of the stronger yen described above and tight supply and demand, among other factors.」
The impact of tight supply-demand conditions has directly appeared in performance as narrower margins, and risks related to procurement conditions and raw-material supply-demand conditions continue to materialize. - FY2023-Q1MaterialisedAnnual report
「Margins narrowed due to tight supply-demand conditions for raw materials,」
Tight supply-demand conditions for raw materials have directly appeared in performance as narrower margins. The procurement risk reaffirmed in the previous fiscal year also materialized in the current quarter. - FY2022RestatedAnnual report
「The Group is working to ensure stable procurement of raw materials by securing multiple suppliers in Japan and overseas. However, if a significant change in market conditions reduces generation or distribution volumes, tightening market supply-demand conditions and resulting in difficulty procuring at appropriate prices, a substantial increase in purchase prices due to procurement shortages, or disruption to production activities, this could have a material impact on the Group's operating results and financial position.」
While maintaining its policy of stable procurement through multiple suppliers in Japan and overseas, the Group continues to identify procurement difficulties, higher purchase prices and possible production disruptions resulting from lower generation and distribution volumes as risks. - FY2021MitigatedAnnual report
「The Group is working to ensure stable procurement of raw materials by securing multiple suppliers in Japan and overseas.」
The Group has explicitly stated its policy of securing multiple suppliers in Japan and overseas, reaffirming its response to the risks of scrap procurement difficulties and higher purchase prices. - FY2020MitigatedAnnual report
「Meanwhile, margins expanded due to higher inventory valuation gains and favorable procurement conditions resulting from the market conditions described above.」
Margins expanded due to favorable procurement conditions and higher inventory valuation gains, and the impact of procurement difficulties and higher purchase prices was mitigated compared with the previous fiscal year. - FY2020-Q3MitigatedAnnual report
「In terms of profits, although the average yen-denominated cash copper price during the period fell 11.5% year on year due to the deterioration in the global economy caused by COVID-19 after the start of the third quarter, we remained profitable in the nine-month consolidated period through the third quarter due to stronger inventory management during the gradual upswing through the second quarter and our ability to maintain stable procurement prices.」
Even during a decline in copper prices, the Company has continued to address the existing risk of higher purchase prices squeezing profits by strengthening inventory management and maintaining stable purchase prices. - FY2020-Q2MitigatedAnnual report
「In terms of profits, although the average yen-denominated cash copper price during the period was down 6.7% year on year, it rose gradually from the beginning of the period through the latter half against growing expectations of an improvement in the global economy, as described above. In addition, stronger inventory management enabled us to maintain stable procurement prices, resulting in solid profitability.」
The Company states that it was able to maintain stable purchase prices by strengthening inventory management, describing measures to address existing risks related to procurement difficulties and higher purchase prices for domestic scrap. - FY2019-Q3WorsenedAnnual report
「Earnings conditions remained difficult due to an 8.5% year-on-year decline in the price of copper, the Company's main product, measured by the LME flat-period average price, amid US protectionist moves including US-China trade friction, as well as tight scrap supply-demand conditions caused by the impact of lower prices.」
Reduced market circulation following the decline in copper prices and tight scrap supply-demand conditions continued, demonstrating the difficult earnings environment in the cumulative third quarter. - FY2019-Q2WorsenedAnnual report
「However, amid weak copper prices, reduced market circulation tightened the supply-demand balance for domestic scrap, leading to higher purchase prices. Profitability was also adversely affected by inventory valuation losses, resulting in difficult earnings conditions.」
Tight supply-demand conditions for domestic scrap led to higher purchase prices and, together with inventory valuation losses, have directly affected profitability. - FY2016First statedAnnual report
「Procurement conditions became difficult and costs rose due to lower copper prices and deteriorating supply and demand for domestic scrap. On the sales side, ingots performed poorly, partly because of the downturn in the shipbuilding industry.」
It states that tight supply-demand conditions for domestic scrap, caused by lower generation and distribution volumes, have already affected the business through procurement difficulties and higher costs.