Enthusiasm for Stockpiling Increased as Absolute Prices of Copper Scrap Rod Tumbled

Last week, affected by the sharp decline in copper prices, the absolute price of copper scrap rods plummeted, growing enthusiasm for restocking across downstream small and medium-sized wire and cable factories. Therefore, the order volume increased compared to a week earlier. However, it is worth noting that most factories reported that compared to the same period last year, the order volume was still lower than expected. Although real estate has recently ushered in a small boom, it will take time for the growing demand to transmit to its upstream sectors. New orders from downstream small and medium-sized wire and cable enterprises last week were still relatively scarce.

As of Friday, copper rod produced with copper scrap in Jiangxi was quoted with discounts of 550 yuan/mt against SHFE front-month copper contract prices. Electric copper rod in east China was quoted with premiums of 675 yuan/mt over the contract, with a narrower price spread of 1,225 yuan/mt between copper cathode rod and copper rod produced with copper scrap.

As of Friday, copper rod produced with copper scrap in Jiangxi was quoted with a discount of 550 yuan/mt against SHFE front-month copper contract prices. Electric copper rod in east China was quoted with premiums of 675 yuan/mt over the contract, with a narrower price spread of 1,225 yuan/mt between copper cathode rod and copper rod produced with copper scrap. Due to the sharp decline in copper prices last week, traders of copper scrap rods have gained greater room for arbitrage operations. Therefore, the prices of copper scrap rods during the week were significantly lower than those of copper rod factories, significantly reducing the inventory at traders.