SMM Weekly Review on Scrap Copper Consumption (July 25th-July 29th)

SHANGHAI, Aug. 2 (SMM) – Last week, refined copper prices followed copper futures prices to fluctuate and then fall slightly, but price offers in scrap copper markets experienced slight increases, especially with bare bright copper prices rising above RMB 63,000/mt, and due largely to the following reasons. First, and also the main reason was that the price ratio has been unfavorable for scrap copper imports, increasing risks for high-quality scrap copper imports and significantly reducing orders from domestic traders. Second, as an important supplementary of copper resources, imports for low-quality scrap copper were also not optimistic, given no clear difference between offers CIF of scrap motors and scrap wires and cables and those in domestic markets, and although importers increased imports of this part scraps due to confidence in future copper prices, these low-quality scrap copper still couldn’t make up losses for high-quality scrap copper. In this context, scrap copper prices were held firm, reducing the price gap between scrap and refined copper to around RMB 1,600-1,900/mt. The narrowed price gap added to downstream producer’s wait-and-see sentiment, propelling copper rod processors to sell some of their inventories for cash generation rather than make purchases. As # 2 copper prices kept stable, copper smelters continued to make purchases given modest price difference.