As Copper Prices Rose, Supply of Secondary Copper Increased but the Increase was Limited

SHANGHAI, Aug 17 (SMM) - From Aug 8 to Aug 14, the secondary copper throughout of East China Nonferrous Metal City in Linyi stood at 12,900 mt, up 1.97% in the week. From Aug 8-12, the weekly average price of 1# copper cathode was 62,063 yuan/mt, up 1,757 yuan/mt or 2.91% from the previous week. The weekly average price of bare bright copper in East China Nonferrous Metal City in Linyi was 57,280 yuan/mt, up 1,040 yuan/mt or 1.85% from the previous week. The price spread between copper cathode and copper scrap stood at only 319 yuan/mt, 76 yuan/mt narrower than a week earlier.

From August 8 to August 12, SHFE copper increased, and the cargo holders shipped actively, hence the supply increased month-on-month. However, some cargo holders were still reluctant to sell. Therefore, the overall social inventory was still low. Since Q2, the supply of domestic secondary copper were tight, especially the supply of secondary copper standard products such as copper wire scrap and bright copper. In August, the terminal infrastructure engineering industry continued to pick up, stimulating the consumption of secondary copper rods. Therefore, the in-plant inventory of raw material was low, and the prices of finished products rose. According to SMM data, as of August 16, in Jiangxi market, the secondary copper rods prices were in premiums of 450 yuan/mt over SHFE 2208 copper contract, and the current SHFE 2208 and 2209 copper contract prices were still in backwardation of 300-400 yuan/mt. The secondary copper rods were more expensive, and is unlikely to replace refined copper rods. Copper prices bounded this week, hence cargo holders of secondary copper were more willing to ship. Due to the increase in secondary copper supply, the operating rates of secondary copper rods increased, but the increase was limited. It is expected that the throughput of secondary copper in East China Nonferrous Metal City continued to rebound slightly this week (August 15) -August 21).