Copper prices fluctuate downward, suppliers are reluctant to stock up too much [SMM Weekly Review of Secondary Copper Raw Material]

SMM, June 5:

         As of June 5, copper prices rose by 300 yuan/mt, with the same increase observed in the price of bare bright copper in Guangdong. Amid the fluctuating and weak trend in copper prices this week, many suppliers of secondary copper raw materials adopted a "quick in, quick out" strategy for selling, leading to continued improvement in raw material procurement for secondary copper rod enterprises compared to last week. Additionally, as the delivery date for orders approaches, the destocking speed of raw materials for secondary copper rod enterprises has accelerated. The inventory of secondary copper rod raw materials stood at 5,400 mt this week, down 150 mt WoW.

        Furthermore, due to the persistent shortage and high prices of high-grade secondary copper raw materials such as bare bright copper, an increasing number of secondary copper rod enterprises are purchasing #1 and #2 copper scrap. After arrival at the factory, they sort the materials, using high-grade ones to produce secondary copper rods and low-grade ones to produce copper anodes.

       This week, the CIF quote for #1 copper scrap in the US was US copper cathode July contract price minus 58-61¢/lb, while the CIF quote for #2 copper scrap was COMEX 3M copper contract price minus 65-67¢/lb. For US brass scrap with a grade of 65-65.5% LME (delivered to non-Chinese regions), the absolute price was $6,300-6,400/mt. The LME coefficient for CIF quotes of non-US Cu98.5% wire nodules was 96.5-97%, and for non-US bare bright copper, it was 98-98.5% LME.

       Looking ahead to next week, if copper prices continue to rise, it could encourage suppliers of secondary copper raw materials to sell more, thereby alleviating the issue of high raw material prices.

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