Copper Prices Swing Wildly, Bare Bright Copper Remains Relatively Firm [SMM Weekly Review of Copper Scrap from Outside China]

SMM August 21 -

This week, LME copper prices showed a wild swings pattern. On Monday, LME copper prices opened at $14,193/mt, shot up to around $14,396/mt, then pulled back to a low of $13,856.5/mt, and climbed again to around $14,100/mt by the end of the week. Affected by the rapid shot-up of copper prices on Monday, the LME coefficient for copper scrap outside China pulled back slightly, with the average transaction coefficient decreasing by about 0.3 percentage points. Subsequently, as copper prices fell, the LME coefficient rebounded accordingly, but the recovery of LME coefficients varied by type of copper scrap.

Among them, bare bright copper, due to persistently tight supply and low inventory levels, saw its LME coefficient basically rebound to a level similar to last week, performing relatively firmly. For No.1 copper and No.2 copper, as supply is more ample than bare bright copper and current market inventory is mainly concentrated in these grades, coupled with signs of slowdown in demand, their LME coefficients still pulled back slightly WoW, with overall support weaker than that of bare bright copper.

On the transaction side, when copper prices pulled back mid-week, market transactions improved, releasing some just-in-time procurement needs. However, after copper prices returned to highs on Monday and at the end of the week, market transactions turned sluggish again. Overall, downstream enterprises remained wait-and-see, with a cautious procurement pace, mostly choosing to restock with just-in-time procurement when copper prices fell.

Looking ahead to next week, LME copper prices are expected to continue to consolidate at highs. The tight supply pattern of copper scrap outside China has not eased significantly, and inventory levels in major regions remain low, providing some support for payable indicators. However, against the backdrop of high copper prices, the demand side is expected to mainly make just-in-time procurement, and market transactions are expected to be sluggish. Overall, LME coefficients for copper scrap outside China are expected to remain stable next week.