SHANGHAI, Apr 3 (SMM) – China's consumption of copper scrap in February registered nearly the biggest drop in seven months as downstream smelters and processors closed for CNY, an SMM research found.
Overall consumption of copper scrap shrank 14.4%, or 25,700 mt, from January, and stood at 152,000 mt in February, SMM data showed. Consumption from both processors and smelters declined on the month.
CNY closure lowered February’s copper scrap consumption across processors by 15,700 mt on the month, to 65,600 mt. After the holidays, however, the scrap material attracted brisk purchases from processors of copper rod as soaring prices of refined copper widened its prices spread with scrap.
The monthly average price spread between refined and scrap copper climbed to 1,304 yuan/mt in February, with a high of 1,500 yuan/mt.
SMM data showed that domestic smelters consumed some 56.8% of the overall copper scrap, or 86,400 mt, in February, down around 10,000 mt from January. Compared with downstream processors, shorter CNY breaks across smelters accounted for the slower drop in consumption. Environmental issues and cash flow problems kept those smelters operating at lows in February.
SMM learned that domestic additions of smelting capacity currently focus on primary copper instead of copper scrap. This was reflected by a 2% increase in copper concentrate imports in February, compared with February 2018.
On a yearly basis, February’s imports of copper scrap and blister copper decreased by 50% and 34%, respectively, in physical content, customs data showed.
SMM data showed that seaborne copper scrap accounted for 56.1%, or 85,300 mt, of overall copper scrap consumption in February.