Copper prices climb, but suppliers of secondary copper raw material choose to hold back sales [SMM Weekly Review of Secondary Copper Raw Material]

SMM News on June 27:

         This week, copper prices rose by 1,000 yuan/mt, with Guangdong's bare bright copper prices ranging from 72,800 to 73,000 yuan/mt, showing only a 200 yuan/mt increase. The price increase of secondary copper raw materials was limited. As secondary copper rod enterprises continued to suffer losses of nearly 500 yuan/mt from sales, their raw material procurement quotes could not keep pace with the rise in copper prices. Even if suppliers of secondary copper raw materials raised their prices, secondary copper rod enterprises could not accept the high-priced raw materials, and ultimately, suppliers of secondary copper raw materials could not sell their inventory.

        This week, the raw material inventory of secondary copper rod enterprises stood at 4,830 mt, up 200 mt MoM. As copper prices continued to rise towards the end of the week, some suppliers of secondary copper raw materials were willing to sell their inventory. However, most suppliers of secondary copper raw materials had a stronger bullish sentiment and were reluctant to sell. In some regions, secondary copper rod enterprises could not procure enough secondary copper raw materials even if they offered 200-300 yuan/mt above the market price. On Thursday night, copper prices in the futures night session surged to 80,000 yuan/mt, and it is expected that suppliers of secondary copper raw materials will actively sell their inventory.

      This week, the CIF quote for US #1 copper scrap was a 75-77¢/lb discount against the COMEX July copper contract price, while the CIF quote for US #2 copper scrap was an 82-84¢/lb discount against the COMEX 3M copper contract price. For US brass scrap with 65-65.5% LME (delivered to non-China regions), the absolute price was $6,400-$6,500/mt. The LME coefficient for non-US Cu98.5% wire nodules CIF quotes was 96.75-97%, and the LME coefficient for non-US bare bright copper CIF quotes was 99-99.5% LME.

      Looking ahead to next week, the rapid rise in copper prices has widened the price difference between copper cathode and copper scrap, stimulating end-use consumption. The rebound in demand has encouraged secondary copper rod enterprises to raise their procurement prices for secondary copper raw materials.

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