Secondary Copper Raw Material Supply Is Tight, Even Leading to Price Increases and Scrambling for Goods [SMM Weekly Review on Secondary Copper Raw Material]

Published: Feb 21, 2025 15:21

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[SMM Analysis: Tight Supply of Secondary Copper Raw Material Leads to Premium Bidding] This week, copper prices fell back from highs and then stopped falling and began to rebound. Although the overall weekly decline was about 400 yuan/mt, the price of bare bright copper in Guangdong rose instead of falling, increasing by 100 yuan/mt. This price trend was mainly driven by insufficient market supply, which struggled to meet the continuously growing demand. Secondary copper rod and anode plate enterprises resumed production, significantly increasing the demand for raw materials...

SMM, February 21: This week, copper prices stopped falling and began to rebound after pulling back from highs. Although the overall weekly decline was about 400 yuan/mt, Guangdong bare bright copper prices rose by 100 yuan/mt instead of falling. This price trend was mainly driven by insufficient market supply to meet the continuously growing demand. Secondary copper rod and anode plate enterprises resumed production, significantly increasing demand for raw materials. However, due to the decline in copper prices, procurement managers at warehouses reported that procurement volumes had not yet returned to previous levels. Meanwhile, the limited output of secondary copper raw materials from dismantling enterprises increased supply-side pressure, prompting suppliers to stand firm on quotes. This week, the raw material inventory of secondary copper rod enterprises reached 9,750 mt, up 5,450 mt MoM, mainly due to the arrival of previously ordered goods. On the import side, Ningbo Daxie Terminal recently strengthened customs inspections on European brass, particularly on undismantled faucets. Secondary brass raw materials with excessive dust and poor quality will face stricter checks. Additionally, Daxie Terminal is constructing a container berth, expected to take one year, which may cause inspection and yard congestion, further affecting the supply of imported secondary copper raw materials. This week, CIF quotes for #1 copper scrap were at COMEX 3M copper contract minus 55-60¢/lb, while CIF quotes for #2 copper scrap were at COMEX 3M copper contract minus 65-70¢/lb. CIF quotes for US brass scrap had an LME coefficient of 67-67.5%, with fixed prices at $6,050-6,100/mt (limited transactions). CIF quotes for non-US Cu98.5% wire nodules had an LME coefficient of 96.25-96.5%, and CIF quotes for non-US bare bright copper had an LME coefficient of 98.5-99% LME. Looking ahead to next week, with secondary copper rod enterprises maintaining relatively sufficient raw material inventories, short-term raw material shortages leading to production cuts are unlikely. However, the phenomenon of price competition for raw materials is expected to become increasingly common. 》Subscribe to view SMM historical spot metal prices 》Click to view the SMM copper industry chain database

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