SHANGHAI, Jun 8 (SMM) – Malaysia announced a full lockdown (FMCO) from June 1-14 due to severe Covid-19 pandemic situations.
The logistics and manufacturing industries that are allowed to continue to operate are limited to production and transportation of some daily and medical necessities. Secondary copper dismantling plants in Malaysia will shut for 14 days due to the blockade, suspending secondary copper exports by Malaysia.
According to customs statistics, China currently imports around 30,000 mt of secondary copper raw materials from Malaysia each month. The FMCO will affect about 15,000 mt of secondary copper imports, which accounts for less than 10% of China’s secondary copper imports. However, plants in Vietnam and other Southeast Asian countries halted production due to lax pandemic control, raising expectations of tighter secondary copper supply. This has bolstered cif quotes for secondary copper.
Secondary copper market was lacklustre last week as weak end-user consumption hampered sales by scrap users, affecting secondary copper consumption. Scrap users pushed for lower prices, while traders refrained from selling at lower prices, keeping trades at a gridlock. The overall supply of secondary copper is not tight. Traders holding back cargoes on Friday when SHFE copper prices plummeted tightened supply. The pandemic in Foshan has driven a small volume of cargoes produced in other regions elsewhere. Restrictions on secondary copper purchases and on the flow of traders had limited impact on overall trades.
Prices of #1 bare bright copper without invoices averaged 65,530 yuan/mt last week, up 500 yuan/mt from the previous week. The average price spread between copper cathode and copper scrap widened 422 yuan/mt to 2,295 yuan/mt. For imported copper scrap, cif quotes for #1 copper scrap were Comex September copper less $0.19-0.2/lb, and offers for birch/cliff were Comex September copper less $0.33-0.34/lb. US brass was quoted at $6,350-6,450/mt. The coefficient for copper granules (98%) against LME copper stood at 94.5% on a cif basis, and the coefficient for bare bright copper against LME copper at 97.25-97.75%, on a cif basis.