SMM Weekly Review on Scrap Copper Imports (Jul. 16-20)

SHANGHAI, Jul. 24 (SMM) – LME copper prices rebounded rapidly last week, but as domestic copper consumption remained sluggish, SHFE copper prices posted weaker performance. Hence, the SHFE/LME copper price ratio dipped to around 7.28. Furthermore, as the price gap among SHFE copper contracts narrowed swiftly, the premium on the SHFE 1208 copper contract became smaller than SHFE copper forward contracts. This implied that losses on imported scrap copper may be moving slightly higher. CIF quotations for #1 scrap copper were thus US 16¢/lb below Comex copper for September delivery last week, and minus US 25-26¢/lb for #2 scrap copper. Losses on imported bare bright copper expanded to RMB 500-700/mt last week. As such, traders became less willing to import scrap copper.