Copper prices fluctuated at a low level for nearly three weeks. Due to the need for capital turnover, some suppliers of copper scrap released some copper scrap. Traders of copper scrap sold at high prices as copper prices rose at the end of the week.
Therefore, the supply of copper scrap increased last week. According to most copper scrap rod factories, the procurement of raw materials last week was easier than the previous week. The raw material inventory of most copper scrap rod factories was about 3 days of production, which is sufficient to maintain normal production, up from 1-2 days of production in the previous week. However, due to the excessive total production capacity of copper scrap rods, the increase in marginal supply is not enough to meet production.
Therefore, the overall supply of copper scrap continued to be tight. It is worth noting that when prices fluctuate at low levels, there are regional differences in the supply of copper scrap. Since copper scrap in Zhejiang and Guangdong are mostly imported copper scrap, most suppliers will use hedging for risk control. Therefore, when copper prices run at a low level, the supply of copper scrap in Guangdong and Zhejiang is slightly more ample than in other regions. Prices of #1 bare bright copper without invoices averaged 60,660 yuan/mt as of last Friday, down 1,400 yuan/mt from a week earlier.
The average price spread between copper cathode and copper scrap stood at 922 yuan/mt. Last week, the copper prices fell at first and then rose, and the copper scrap suppliers shipped at high prices. In addition, copper scrap suppliers sold to generate cash. Therefore, the marginal supply of copper scrap increased last week.
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