Last week, copper prices retreated from above 69,500 yuan/mt to around 68,700 yuan /mt. Subsequently, SHFE copper traded in a narrow range between 68,000 yuan/mt and 69,000 yuan /mt. As a result, there is limited room for profit for copper scrap traders who rely on buying low and selling high. Furthermore, with a significant release of copper scrap last week due to the decline in copper prices, scrap material traders faced insufficient inventory, leading to a noticeable decline in the supply of copper scrap compared to the previous week.
Recent research shows that VAT in the Jiangxi region have increased, which were raised for most enterprises from 5.8% to 6.0%. VAT for some companies in Jiangxi even reached as high as 6.4%. Under the dual impact of tightening supply of copper scrap and increased tax costs, the average weekly price spread between copper cathode and scrap decreased by 190 yuan/mt to 1,606 yuan /mt last week. However, the price spread remained above the advantageous line, which still favored the consumption of scrap materials. Last week, imports of copper scrap continued to incur losses, resulting in sluggish actual transactions in the copper scrap market.
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