SMM Price Outlook for Base Metals on SHFE (Jul. 10, 2017)

Chinese customs inspections on imported recycled copper raw materials have continued to tighten, leaving a growing volume of non-compliant copper scrap held up at ports. According to SMM market checks, nearly 10,000 tonnes of copper scrap are currently waiting in Hong Kong for entry into Guangdong. Longer customs clearance times are increasing inventory and working-capital pressure on some traders. The affected cargoes are mainly No.2 copper originating from Latin America and Southern Europe. With customs inspections remaining stringent, disruptions to scrap inflows are reducing the effective availability of imported copper scrap in the Chinese market and adding to near-term supply tightness.

China's copper scrap pricing coefficients moved broadly higher this week, supported by tight invoice availability, elevated refined copper spot premiums and disruptions to overseas scrap imports. Tight domestic feedstock availability has prompted Chinese buyers to raise bids. Millberry is currently quoted at around 98.5%–99.5% of LME copper, No.1 copper at 97.5%–98.5%, and No.2 copper at around 96.5%, while some No.2 material containing gold and silver can reach around 98%. Higher Chinese bids are increasingly feeding through to overseas markets, strengthening sellers' pricing expectations and pushing up copper scrap coefficients in several regions. With China's invoice constraints yet to ease materially and imported scrap availability remaining tight, copper scrap pricing coefficients are expected to remain well supported in the near term.

[SMM 황동 빌릿 플래시] 다음 주(10.2-10.8)를 전망하면, SMM 구리 빌릿 샘플 기업의 근로자들은 일반적으로 4-5일간 휴무할 예정이며, 평균 휴무 기간은 전년 동기와 거의 같고 0.08일 소폭 증가했다. SMM은 황동 빌릿 샘플 기업의 가동률이 전월 대비 3.39%포인트 하락한 34.51%로 추가 하락할 것으로 예상한다. 구리 가격이 높은 수준을 유지함에 따라 기업들은 신중한 태도를 보이고 있으며, SMM은 10월 수요가 크게 개선되기 어려울 것으로 전망한다.