SMM Weekly Review on Scrap Copper Consumption Advantages (Oct. 10-14)

SHANGHAI, Oct. 18 (SMM) –Recently, we have been seeing a near inversion in the price relationship between refined and bare bright copper as the price gap between refined and scrap copper has continually narrowed, and the discount on US #2 copper over refined copper has fallen to around RMB 1,000/mt. While copper prices have slumped, scrap prices have remained resilient, nearly erasing the price differential between the two, largely owing to extreme tightness in scrap copper supply. SMM believes that scrap copper imports may increase slightly as the profitability that emerged in August continues to drive trade, but that supply shortages in the market will remain in place, widening the spread again, but that it will be difficult for the spread to recover to the RMB 1,000-1,500/mt range.