Copper scrap consumption recovers in Mar as processors return from CNY holiday

SHANGHAI, May 7 (SMM) – Copper scrap consumption across China sharply recovered in March as downstream smelters and processors returned from the Chinese New Year holiday, an SMM research found. 

Overall consumption of copper scrap expanded 34.8%, or 52,900 mt, from February and stood at 205,000 mt in March, SMM data showed.

Consumption across mills and foundries accounted for 114,900 mt, or 56.04%. This was up 49,200 mt from a month ago.

Sufficient supplies and robust demand also contributed to the greater consumption of copper scrap in March. Price spreads between copper scrap and copper cathode remained above 1,500 yuan/mt for much of the month, which raised the appeal of copper scrap.

SMM data showed that operating rates across copper rod producers who use copper scrap as raw materials averaged 71.25% in March, the highest since May 2018. The reading rose by 26.78 percentage points from February, the biggest month-over-month increase since the survey began in April 2018.

A total of 90,100 mt of copper scrap returned to the smelting and refining stages in March. This inched up 3,700 mt from a month ago and accounted for 43.96% of the overall consumption.

Seaborne materials accounted for 47.59%, or 97,500 mt of copper scrap consumption.

Copper scrap imports for the month came in at 113,500 mt in physical volume, down 52.05% year on year. This equated to 89,300 mt in Cu content, down 26.17% from a year earlier.

The sharp decline in imports primarily affected small and medium-sized consumers. Major secondary smelters, such as Jintian and Ningbo Shimao, have yet to feel the impact from the stricter controls over waste imports, and they hold sufficient supplies of copper scrap imports and maintain stable production. But they are unlikely to step up output amid concerns about supplies of raw materials.