Copper Prices Surge Rapidly as Suppliers Sell at High Levels [SMM Secondary Copper Raw Material Weekly Review]

SMM, March 14:

       Affected by the news of production cut plans by domestic smelters, copper prices surged over the weekend from 77,900 yuan/mt to 79,900 yuan/mt before pulling back to 79,200 yuan/mt, with a weekly increase of 1,300 yuan/mt. Bare bright copper also saw an increase of nearly 1,200 yuan/mt. Suppliers of secondary copper raw materials chose to sell at highs. However, according to secondary copper raw material yard managers interviewed, the current recycling volume of secondary copper raw materials remains low. The recycling volume from old scrap dismantling enterprises has not shown significant growth, and the output of new scrap remains low due to limited new orders from terminal processing enterprises, a trend that has persisted since the beginning of the year. As a result, the current inventory of secondary copper raw material yards is only 50%-60% of the same period in previous years.

       In terms of imports, although the EU's new regulations on waste exports to non-EU countries have come into effect, domestic import traders stated that this has not had a significant impact on secondary copper raw material exports from Europe for the time being. However, due to the global shortage of ore, EU countries have restricted the export of high-grade, high-quality secondary copper raw materials, leaving domestic importers with only copper wire nodules or brass scrap to purchase. Interviewed enterprises pointed out that the EU's new regulations mainly target solid waste, while copper scrap is classified as secondary copper raw material and is not expected to face export restrictions. However, with the increase in local copper scrap recycling and processing enterprises in Europe, the export volume of European copper scrap may show a downward trend in the future.

       This week, US #1 copper scrap CIF was quoted at COMEX May copper contract minus 62-64¢/lb, and US #2 copper scrap CIF was quoted at COMEX March copper contract minus 73-75¢/lb. US brass scrap CIF was quoted with an LME coefficient of 65%-66% and a fixed price of $6,150-$6,250/mt (limited transactions). Non-US Cu98.5% wire nodules CIF were quoted with an LME coefficient of 95.75%-96.25%, and non-US bare bright copper CIF was quoted with an LME coefficient of 98.5%-99% LME.

       Looking ahead to next week, copper prices are expected to hover at highs, which will suppress secondary copper rod enterprises' procurement, and the inventory of secondary copper raw material yards may increase.

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