Throughput of Copper Scrap in the East China Metals Market Remained Low as the Traders were Reluctant to Ship

SHANGHAI, Aug 2 (SMM) - From July 25, 2022, to July 31, the throughput of copper scrap in the East China Nonferrous Metals Market was 8,300 mt, down 1.72% WoW, and the decline was greatly narrowed. According to the SMM data (July 25-July 29), the weekly average price of  #1 copper cathode was 58,950 yuan/mt up 2,688 yuan/mt or 4.98% from the previous week, and that of bare bright copper in the Linyi Metal Market stood at 53,990 yuan/mt, up 2,560 yuan/mt or 4.78%. In China, the spread between the copper cathode and copper scrap stood at 1,123 yuan/mt, which widened by 38 yuan/mt from the previous week.
Last week (July 25- July 29), copper prices rebounded, but the copper scrap traders were reluctant to sell due to their limited in-plant inventory and the huge losses brought by the sharp drop in copper prices earlier, resulting in tight supply in the copper scrap market, which further led to the low operating rates of secondary copper rod producers. Generally speaking, the rise and fall of copper prices are closely related to the copper scrap traders’ sentiment, which further will improve the copper scrap supply to some extent. However, SMM expects that if the prices of copper cathode remain rangebound at high levels this week, the sources of copper scrap will gradually flow into the market to ease the long-term supply tightness. In August, the downstream wire and cable companies are in the peak season, and the demand may rise MoM, boosting the demand for copper scrap. SMM expects that the throughput of copper scrap in the East China Nonferrous Metals Market will rise slightly from August 1 to August 7, but the volume is still far lower than the level when the copper prices were 70,000 yuan/mt.