SHANGHAI, Mar. 16 (SMM) – Trading in China’s domestic copper scrap market has been strong recently, Shanghai Metals Market survey finds.
SMM attributes hot scrap trading to following factors.
First, orders have been recovering in China’s domestic market after Lantern Festival on February 11, growing demand for copper rod.
Second, high refined copper cathode prices also hit buying interest in refined copper, and producers increased the using of the scrap material after the price gap between the two expanded, to reduce production costs. This also explained the decline in processing fees for copper rod with refined copper as raw material, in addition to the impact from rapid copper rod capacity expansion.
According to SMM data, the price gap between refined cathode copper and copper scrap narrowed quickly to around 1,400 yuan per tonne, down from the high level of 3,000 yuan per tonne seen before the 2017 Chinese New Year holiday.
At present, producers prefer to buy copper scrap as raw material due to lower costs, contributing to high scrap trading.