Supply of copper scrap tightened again

The operating rates of copper rod plants using copper scrap were 44.65% between September 8 and September 14, a rise of 3.71 percentage points from a week ago, according to SMM survey of 15 plants with a capacity of 1.48 million mt/year). One of the copper rod plants using copper scrap as raw material in the survey sample completed maintenance and restarted production last week, bolstering the average operating rate. Excluding this plant, the operating rate declined slightly last week.

On the supply side, as copper prices failed to stay above 69,500 yuan/mt, the enthusiasm of traders for selling copper scrap weakened. Last week, the price spread between copper cathode and copper scrap stayed below the advantageous level of 1,000 yuan/mt for scrap users until Thursday. Most copper rod plants using copper scrap as raw material reported low access to raw materials compared with a week earlier amid tight copper scrap supply. The order delivery period stood at up to around seven days.

On the consumption side, copper rod plants using copper scrap as raw material raised prices due to the tight supply of copper scrap. Discounts of copper rod produced with copper scrap did not exceed 300 yuan/mt during the week and mainly stood at around 150 yuan/mt, with no economic benefits. As of Thursday September 14, the price spread between copper rod produced with copper cathode and with copper scrap stood at 785 yuan/mt, which was below the advantageous level for the users of copper rod produced with copper scrap.