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[SMM analysis] when it is warm and cold, is the scrap copper still "fragrant"?
Apr 2,2020 18:33CST
The content below was translated by Tencent automatically for reference.

SMM4 month 2: the weather is warm and cold, just as the copper price at this time to rise and fall, really let scrap copper merchants worry, act cautiously. For this reason, the editor sorted out the scrap copper market in the first quarter and the latest situation for your review and reference.

Supply recovery process:

The sudden epidemic situation, in addition to affecting the pace of start of the enterprise, but also caught the scrap copper merchants caught off guard, had to insist on covering the goods waiting for the market to improve, at the same time, in addition to orders, do not dare to receive goods at will, so the supply of domestic copper scrap is scarce in February-March. Imports are also unsatisfactory. China imported 119520 tons of scrap copper from January to February 2020, compared with 241522 tons in the same period last year, down 50.5 per cent from the same period last year, according to customs data.

At the end of March, the recovery of copper prices was fair, and some scrap copper merchants did some fast-forward and fast-out trade to avoid risks in order to alleviate the pressure of capital turnover, or under unknown copper prices. According to a large recycling enterprise, the trade volume in March was about 1 / 3 of the normal period. In addition, the Malaysian action control order has been extended to mid-April, and the current scrap copper dismantling, smelting and export have remained stopped, and it is estimated that the import volume from March to April will not be very optimistic.

Production recovery process:

In February, the operating rate of scrap copper rod enterprises was only 6.47%, down 38.01% from the same period last year. So far, a considerable number of enterprises have not resumed production, due to the lack of profit space or raw materials are difficult to be guaranteed. Scrap copper rods, copper strip foil and other enterprises helplessly mixed with electrolytic copper production, it is expected that the operating rate in March and April should increase, but there will not be much improvement.

Brass enterprise situation is better, because of the use of raw materials and collocation of a variety of ways, supply and profits can ensure production. In February, the average operating rate of brass rod enterprises was 25.06%, down 20.24 percentage points from the previous month and 15.46 percentage points from the same period last year. The operating rate of brass bar enterprises in March is expected to be 64.24%, up 39.18 percentage points from February and down 16.49 percentage points from the same period last year.

Overall, the copper scrap industry in the first quarter is still relatively bleak, but upstream and downstream enterprises have a certain recovery, compared to February almost stagnant has been much better, winter has passed, spring is still far behind? According to SMM, recently, some businesses have overstocked some waste copper, can not find the source of goods and even hoarded some electrolytic copper, the mood has been reversed, if the copper price can stabilize and maintain the upward trend, the scrap copper industry should continue to improve.


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