SMM News on June 20:
Copper prices jumped initially and then pulled back during the week, with a decline of 200 yuan/mt. The price of bare bright copper in Guangdong ranged from 72,800 to 73,000 yuan/mt, showing a drop of 100 yuan/mt. At the beginning of the week, copper prices initially showed an upward trend, and suppliers of secondary copper raw materials increased their willingness to sell. However, as copper prices pulled back towards the end of the week, suppliers were reluctant to sell at lower prices. Copper rod enterprises generally reported a significant decrease in procurement volume. According to SMM's statistics on the raw material inventory of sampled secondary copper rod enterprises, the inventory stood at 4,630 mt, a decrease of 1,970 mt MoM.
In addition, many enterprises indicated that they would fully implement the "reverse invoicing" work starting from H2. However, if the stalls or yards of secondary copper raw materials do not cooperate, it will pose significant obstacles to the procurement work of secondary copper rod enterprises. Currently, the raw materials of most secondary copper rod enterprises can only sustain one day of production. If suppliers of secondary copper raw materials are unwilling to sell, secondary copper rod enterprises may reduce their operating days.
This week, the CIF quotation for #1 copper scrap in the US was the COMEX July copper contract price minus 52-54¢/lb. The CIF quotation for #2 copper scrap was the COMEX 3M copper contract price minus 59-61¢/lb. The quotation for US brass scrap with a purity of 65-65.5% LME (delivered to non-Chinese regions) was an absolute price of $6,200-6,300/mt. The LME coefficient for the CIF quotation of non-US Cu98.5% wire nodules was 96.75-97%, and the LME coefficient for the CIF quotation of non-US bare bright copper was 99-99.5% LME.
Looking ahead to next week, copper prices are expected to maintain a fluctuating trend. If secondary copper rod enterprises do not raise their procurement prices, it may be difficult for them to procure sufficient secondary copper raw materials to meet production needs.
