Copper Prices Rebound, Marginal Recovery in Secondary Copper Raw Material Supply [SMM Weekly Review on Secondary Copper Raw Material]

Published: Mar 7, 2025 15:25

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[SMM Analysis: Copper Prices Rebound, Marginal Recovery in Secondary Copper Raw Material Supply] During the week, US President Trump mentioned the possibility of imposing tariffs on imported copper cathode. Following the news, US copper cathode futures surged rapidly, driving up LME copper and SHFE copper prices. This week, copper futures prices rose by 1,400 yuan/mt, while Guangdong bare bright copper prices increased by 900 yuan/mt. On Thursday, copper prices quickly climbed to 78,400 yuan/mt, approaching the previous high of 78,400 yuan/mt. Secondary copper raw material suppliers took advantage of the high prices to sell off...

SMM March 7 News:
This week, US President Trump mentioned the imposition of tariffs on imported copper cathode. Following the announcement, COMEX 3M copper contract prices surged rapidly, driving up LME copper and SHFE copper prices. Copper futures prices rose by 1,400 yuan/mt this week, while Guangdong bare bright copper prices increased by 900 yuan/mt. On Thursday, copper prices quickly climbed to 78,400 yuan/mt, approaching the previous high of 78,400 yuan/mt. Secondary copper raw material suppliers took advantage of the high prices to sell, and secondary copper rod enterprises reported a significant increase in the circulation of secondary copper raw materials in the market after the copper price rebound. According to inventory data from secondary copper rod sample enterprises, raw material inventory this week was 4,690 mt, down by 3,310 mt from last week's 8,000 mt. However, the inventory did not decline further due to limited growth in terminal cable orders and suppressed downstream demand under high copper prices. As a result, secondary copper rod enterprises were reluctant to purchase large quantities of secondary copper raw materials at high prices, maintaining only just-in-time procurement.

Additionally, regarding the implementation of "reverse invoicing," secondary copper rod enterprises across the country have successively enforced the policy. These enterprises raised secondary copper raw material procurement prices to encourage upstream suppliers to cooperate with the "reverse invoicing" process. Most secondary copper raw material suppliers were willing to cooperate actively. However, the rise in copper prices on Thursday and Friday increased procurement costs for secondary copper rod enterprises, leading to a cooling sentiment in procurement on Friday.

On the import side, after Trump imposed an additional 10% tariff on China, import traders once again halted imports of secondary copper raw materials from the US. It is expected that the tight supply of imported secondary copper raw materials will persist throughout the year.

This week, US #1 copper scrap CIF was quoted at COMEX May copper contract price minus 55-57¢/lb, while US #2 copper scrap CIF was quoted at COMEX March copper contract price minus 66-67¢/lb. US brass scrap CIF was quoted with an LME coefficient of 65-66% and a fixed price of $6,150-6,250/mt (limited transactions). Non-US Cu98.5% wire nodules CIF were quoted with an LME coefficient of 95.75-96.25%, and non-US bare bright copper CIF was quoted with an LME coefficient of 98.5-99% LME.

If copper prices pull back next week, the supply of secondary copper raw materials will return to a tight state.
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