SMM Price Outlook for Base Metals on SHFE (Jul. 10, 2017)

Chinese customs inspections on imported recycled copper raw materials have continued to tighten, leaving a growing volume of non-compliant copper scrap held up at ports. According to SMM market checks, nearly 10,000 tonnes of copper scrap are currently waiting in Hong Kong for entry into Guangdong. Longer customs clearance times are increasing inventory and working-capital pressure on some traders. The affected cargoes are mainly No.2 copper originating from Latin America and Southern Europe. With customs inspections remaining stringent, disruptions to scrap inflows are reducing the effective availability of imported copper scrap in the Chinese market and adding to near-term supply tightness.

China's copper scrap pricing coefficients moved broadly higher this week, supported by tight invoice availability, elevated refined copper spot premiums and disruptions to overseas scrap imports. Tight domestic feedstock availability has prompted Chinese buyers to raise bids. Millberry is currently quoted at around 98.5%–99.5% of LME copper, No.1 copper at 97.5%–98.5%, and No.2 copper at around 96.5%, while some No.2 material containing gold and silver can reach around 98%. Higher Chinese bids are increasingly feeding through to overseas markets, strengthening sellers' pricing expectations and pushing up copper scrap coefficients in several regions. With China's invoice constraints yet to ease materially and imported scrap availability remaining tight, copper scrap pricing coefficients are expected to remain well supported in the near term.

[SMM Flash de Varas de Latão] Olhando para a próxima semana (2/10 a 8/10), os trabalhadores das empresas da amostra de tarugos de cobre da SMM geralmente terão 4 a 5 dias de folga, com a duração média das férias basicamente estável em relação ao ano anterior, com leve alta de 0,08 dia. A SMM espera que a taxa de operação das empresas da amostra de tarugos de latão recue ainda mais para 34,51%, queda de 3,39 pontos percentuais em relação ao mês anterior. Com os preços do cobre permanecendo elevados, as empresas estão cautelosas, e a SMM espera que a demanda em outubro apresente pouca melhora.