SMM Weekly Review on Scrap Copper Consumption Advantages (Oct. 31-Nov. 4)

SHANGHAI, Nov. 10 (SMM) –The price differential between scrap and refined copper has been inverted recently, largely due to the following: First, buying interest within China has been depressed this year due to unpredictable copper price trends, a persistently unfavorable SHFE/LME copper price ratio, difficulties in customs clearance and increasing costs. Second, most cargo-holders of scrap copper faced heavy losses after LME copper prices fell from a high of USD 9,500/mt, while the lack of opportunity to restock propelled them to hold back goods, helping keep scrap copper prices up. As such, the price differential between scrap and refined copper inverted and has remained so. Last week, the price difference between bare bright copper (including tax) and refined copper was RMB 200/mt. Fewer downstream producers showed any intention to buy, resulting in a quiet scrap copper market.