Scrap Copper Inventories Fall to 4 Days in September

SHANGHAI, Oct. 16 (SMM) –SMM's latest survey revealed that scrap copper inventories fell marginally to 4 days in September. As easing measures in the US and Europe lifted markets, copper futures prices began increasing significantly since early September, but scrap copper prices were extremely slow in following increases as they are more driven by spot copper supply and demand rather than the financing demand. Hence, the price difference between bare bright (including tax) and refined copper expanded to as high as around RMB 2,000/mt from about RMB 1,000/mt, which stimulated downstream consumers to buy scrap copper in large quantities as a substitution for refined copper. This accelerated consumption of scrap copper stocks. Inasmuch as increase in the amount of scrap copper arriving at Chinese ports is limited, SMM believes domestic scrap copper supply will become tight in the foreseeable future.