Copper Prices Tumble, Quiet Scrap Copper Transactions

SHANGHAI, Aug. 10 (SMM) –After copper prices tumbled last week, the price gap between scrap and refined copper has narrowed rapidly around RMB 500/mt. For risk aversion, most copper processing companies have stopped purchasing temporarily.

Traded copper prices are generally between RMB 66,950-67,200/mt in Jiangsu, Zhejiang and Shanghai, but trading sentiment in scrap copper market is low. Due to a slump in copper prices last week, cargo-holders of scrap copper are generally losing money, as they couldn’t digest earlier higher costs. Coupled with slight declines in overseas scrap copper prices, cargo-holders are more reluctant to make sales.

At present, mainstream offers for scrap copper are between RMB 60,000-60,500/mt, and RMB 66,600/mt if tax included, which is just RMB 500/mt lower than spot refined copper. The narrowed price gap puts copper rod producers in a hard position, as their inventories are in loss on one hand and they have difficulties in purchasing at low prices.

In general, dropping copper prices keep scrap copper traders on the sidelines, resulting in quiet market transactions.