Price: Sharp refined copper price decline narrows refined-scrap price spread
China's refined copper prices fell sharply, weighed down by macro factors. In contrast, although copper scrap prices also declined, they remained relatively resilient due to tight spot supply, causing the refined-scrap copper price spread to narrow considerably. Looking ahead, copper prices are expected to stay at recent low levels in the near term, but a potential rebound is likely to widen the refined-scrap copper spread slightly this week from earlier levels.
Data Source: Mysteel
Supply: Falling profits sharply tighten copper scrap market circulation
The spot availability of copper scrap in China declined last week. In the red copper scrap segment, the lower price center kept overall trading subdued. Upstream traders' in-hand inventories were generally in loss-making territory, and coupled with high purchase prices for copper scrap, the strategy of buying at lower prices to dilute costs proved largely ineffective. As a result, copper scrap traders showed weak willingness to both buy and sell. In the brass scrap segment, prices fell in tandem with copper prices. Upstream traders' inventories were largely loss-making, leading to a strong reluctance to sell. Additionally, small-scale suppliers held firm on their offers, making it difficult for traders to restock at lower prices. This further dampened overall trading sentiment and tightened spot supply of copper scrap. Looking ahead, copper scrap prices are expected to undergo a modest correction in the near term. However, given the high purchase costs incurred by holders earlier and the low bids from downstream enterprises, trading margins are unlikely to recover significantly in the short run, and copper scrap availability is expected to remain tight.
Demand: Copper scrap spot deals stay largely need-based with limited improvement
Spot trading in the copper scrap market remained subdued last week. In the red copper scrap segment, downstream producers largely stuck to need-based purchases and showed limited acceptance of copper scrap at current price levels. This, together with tight spot availability, kept overall spot trading weak. Some producers, concerned about invoice risks, preferred to source invoiced copper scrap or refined copper. In the brass scrap segment, although prices trended lower, orders at downstream processors did not improve meaningfully, as some end-users held a bearish outlook. At the same time, brass scrap prices stayed relatively firm compared with refined copper, squeezing production margins for downstream brass fabricators and forcing them to maintain a cautious procurement strategy. Looking ahead, given weak end-use consumption and high raw material prices in the near term, copper scrap demand from both scrap-based anode producers and secondary copper processors is expected to remain limited.
More regular analysis and comprehensive data on China's copper industry are available in Mysteel Copper Weekly, Mysteel Copper Monthly, and Mysteel Copper Database. Reach out to us via Mysteel's official website: Latest & Reliable Copper Market Price in China | Mysteel, and follow Mysteel Non-Ferrous for more insights!
Written by Zhaorui Cui, cuizhaorui@mysteel.com
Edited by Mingyuan Wang, wangmingyuan@mysteel.com
