SHANGHAI, Mar 31 (SMM)—Orders at secondary copper rod plants remained sluggish last week, while sales were poor, growing overall inventory level of finished products. Plants standing around the breakeven level against low finished product prices plan to lower operating rates, weakening purchases of secondary copper. Those plants worked through inventories and some of the producers have halted purchases for some time. Weaker demand resulted in ample supply of high-quality secondary copper and that kept traded prices at low levels.
On Wednesday, the stranding of a huge vessel at Suez Canal hampered the logistics and transportation between Europe and Asia. Europe is an important supplier of secondary copper to China in addition to Southeast Asia and America. According to SMM data, China imported around 9,000 mt of secondary copper from Europe in January, accounting for about 8% of the total import volume, and most of which was brass. If the waterway is blocked for a long time, brass supply from end April to May should be affected.
The average weekly price of #1 bare bright copper without invoice stood at 59,470 yuan/mt, a decline of 460 yuan/mt compared with the previous week, and the weekly average price difference between copper cathode and copper scrap stood at 2,088 yuan/mt, a drop of 129 yuan/mt. The average weekly discount of copper rod produced with secondary copper stood at 1,544 yuan/mt against the SHFE front-month copper contract, growing the advantage compared to copper rod produced with copper cathode.
For imported copper scrap, cif quotes for #1 copper scrap were Comex July copper less $0.2/lb, and offers for birch/cliff were Comex July copper less $0.35/lb. US brass was quoted at $5,700-5,800/mt. The coefficient for copper granules (98%) against LME copper stood at 93%, and the coefficient for bare bright copper against LME copper at 96-96.5%, on a cif basis.
