Price Difference between Copper Cathode and Copper Scrap Remained Low, Copper Scrap Supply Tightened

Copper prices continued to fall last week, and rebounded at the end of the week. Sellers were reluctant to sell their goods, and the supply of copper scrap decreased significantly compared with the previous week. Most buyers of copper scrap said that it was difficult to purchase and raw materials could not meet normal production. Although the supply of copper scrap in various places was relatively tight, Zhejiang mainly uses imported copper scrap and most suppliers of copper scrap use hedging for risk control.

Therefore, they will continue to release goods. It is worth noting that due to the huge production capacity of secondary copper rods, the supply of copper scrap in Zhejiang last week also showed a significant contraction compared with the previous week. In addition, due to the relatively ample copper scrap supply, some secondary copper rod plants shifted to produce copper anode. However, because the current price difference between copper cathode and copper scrap remained below the advantage level, the profit of copper anode plate production has been squeezed. Therefore, some copper anode plate factories stopped production, and the proportion of copper scrap flowing into the smelting sector has decreased.

Prices of #1 bare bright copper without invoices averaged 59940 yuan/mt as of last Friday, down 720 yuan/mt from a week earlier. The average price spread between copper cathode and copper scrap stood at 924 yuan/mt. As copper prices continued to fall last week, suppliers of copper scrap were more reluctant to sell goods until Friday, when copper prices stopped falling and rebounded. The supply increased slightly.

For copper scrap, cif quotes for #1 copper scrap were Comex September copper contract prices less $0.08-0.09/lb, and offers for birch/cliff were Comex September copper prices less $0.19-0.2/lb. The coefficient for US brass against LME copper was 68-69%, with the fixed prices of $5,550-5,650/mt. The coefficient for copper granules (Cu 98.5%) against LME copper was 96-96.25% on a cif basis, and the coefficient for bare bright copper against LME copper at 99-99.25%, on a cif basis.

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