Price: Rising copper prices widen refined-scrap spread
China's refined copper prices edged up slightly last week, while copper scrap prices followed the rise but by a smaller margin, widening the refined-scrap copper price spread. Looking ahead, refined copper prices may dip modestly this week, pressured by geopolitical disruptions, with copper scrap prices expected to track the decline. However, given tight copper scrap supply, the drop in scrap prices is likely to be smaller, and the refined-scrap copper price spread in China is expected to narrow this week.
Data Source: Mysteel
Supply: Copper scrap spot supply remains tight
China's copper scrap supply saw limited improvement last week. In the red copper scrap segment, although copper prices increased, upstream traders stayed cautious, keeping both raw material purchases and sales low. Hot and rainy weather hampered transportation, leaving spot material scarce and slowing traders' collection progress. Meanwhile, relatively few downstream processors were in operation, and their bids fell short of holders' expectations, with narrow margins dampening selling interest. In the brass scrap segment, when copper prices fell early in the week, inventory losses for holders deepened, reinforcing a strong reluctance to sell. As copper prices subsequently recovered, some inventory returned to profit, gradually loosening market supply, but the overall improvement in spot tightness remained limited. Looking ahead, difficulty in sourcing copper scrap in the near term will push up holders' costs, yet downstream users are generally reluctant to accept high prices. Consequently, spot availability in China's copper scrap market is unlikely to improve materially in the near term.
Demand: Copper scrap trading improves only marginally
Spot trading volumes in the copper scrap market remained low last week. In the red copper scrap segment, although downstream producers held low raw material inventory, sluggish finished-product orders and elevated copper scrap prices dampened their raw material procurement appetite. In addition, disruptions from invoice issues pushed up the price of tax-included copper scrap, further curbing procurement interest. Consequently, even though the refined-scrap copper price spread widened last week, downstream mills' restocking willingness showed little improvement. In the brass scrap segment, end-users placed orders cautiously amid copper price volatility, purchasing only based on immediate needs. Combined with generally high copper scrap prices in the market, downstream firms largely procured based on sales orders, leaving overall demand weak. Looking ahead, downstream consumption is unlikely to improve significantly in the near term. For copper anode producers using scrap, elevated copper scrap prices and tight availability are still expected to curb their copper scrap purchasing needs. As for secondary copper processors, weak order inflow from end-users during the off-season is likely to continue weighing on their raw material procurement.
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!
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Written by Zhaorui Cui, cuizhaorui@mysteel.com
Edited by Mingyuan Wang, wangmingyuan@mysteel.com
