Due to the surge in the US dollar index during the National Day holidays, copper prices have been fluctuating at low levels after the holidays. Traders of copper scrap still refrained from selling their cargoes, thus the tight supply of copper scrap was not alleviated. The price spread between copper scrap and copper cathode continued to hover around 350 yuan/mt, diminishing the cost efficiency of copper scrap.
According to SMM survey, due to the shortage of copper scrap before the holidays, most copper rod plants using copper scrap as raw material shut down their furnaces during the National Day holidays. As the supply of copper scrap failed to improve after the holidays, the production resumption was delayed. It was difficult for some copper rod plants using copper scrap as raw material to maintain continuous production after resumption and some copper rod factories even used non-standard copper cathode for production.
this week, the US dollar index will be falling amid dovish tone of the Federal Reserve, which will have a certain boost on copper prices. Should copper prices rise this week, the shipments of traders will improve. That will improve copper scrap supply.
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