Supply of Copper Scrap Continued to Recover as the Copper Prices Trended Higher

SHANGHAI, Sep 16 (SMM) - Copper scrap supply continued to improve as the scrap traders sold more goods amid the rebound in copper prices since mid-July. According to SMM data, the throughput of copper scrap in the East China Nonferrous Metals Market was about 22,000 mt from August 22 to August 28, up 29.15% WoW. According to some scrap users, the procurement of bare bright copper and other products improved, thus they could maintain the normal production of some production lines. In addition, the pandemic situation in Guixi city, Jiangxi province eased, and transportation conditions became normal. The local scrap users were able to purchase copper scrap smoothly.

According to customs statistics, the import volume of copper scrap in July was 155,200 mt, down 6.04% from the previous month. The imports totalled 1.04 million mt from January to July, a year-on-year increase of 6.77%. The decline in imports in July was in line with the expectations, which was caused by the sharp drop in copper prices in late June, the losses of overseas suppliers, the tight supply of high-quality red copper scrap, and the poor demand for imported brass scrap from domestic copper billet companies. It is expected that overseas sources will continue to flow into China as the domestic copper prices rebounded in July, which will supplement the supply gap to a certain extent.

In general, the demand from wire and cable and other sectors was stable and improving, and the consumption in the third quarter was expected to improve. However, the total supply of red copper scrap was still limited, while the potential demand is strong. It is expected that the supply of red copper scrap is unlikely to become sufficient.