Price Difference Between Primary Metal and Scrap Widens, Suppliers' Willingness to Sell Increases [SMM Secondary Copper Raw Material Weekly Review]

SMM, January 10:

      This week, domestic copper social inventory saw significant destocking, pushing up the center of copper prices, with an increase of 1,900 yuan/mt. As of January 9, the weekly average price of Guangdong bare bright copper was 68,400 yuan/mt, up 800 yuan/mt. The price difference between primary metal and scrap expanded from 1,545 yuan/mt to 2,209 yuan/mt. Secondary copper raw material suppliers sold actively at high prices, and many secondary copper rod plants reported a significant WoW increase in secondary copper raw material supply. However, some enterprises in Hubei and Anhui provinces have stopped accepting new orders. Coupled with the generally moderate pre-holiday inventory sentiment among secondary copper rod enterprises, the market demand for secondary copper raw materials weakened compared to last week, making the supply relatively ample. This week, the raw material inventory of sampled secondary copper rod enterprises was 4,750 mt, down 350 mt WoW. Secondary copper raw material suppliers are still gradually adapting to the relevant processes of "reverse invoicing." After the Chinese New Year holiday, it is expected that the transaction model between secondary copper raw material suppliers and secondary copper rod plants will mainly adopt "reverse invoicing."

        This week, the CIF quotation for #1 copper scrap was the COMEX 3M copper contract price minus 27-28¢/lb, and for #2 copper scrap, it was the COMEX 3M copper contract price minus 34-36¢/lb. The CIF quotation for US brass scrap had an LME coefficient of 67-67.5%, with a fixed price of $6,000-6,050/mt (limited transactions). The CIF quotation for non-US Cu98.5% wire nodules had an LME coefficient of 96.25-96.5%, while the CIF quotation for non-US bare bright copper had an LME coefficient of 98.5-99% LME.

        Looking ahead to next week, some secondary copper rod enterprises are expected to shut down furnaces for the holiday, and secondary copper raw material suppliers are likely to gradually stop purchasing, with the remaining time mainly focused on completing order deliveries.

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