Price: Rising copper prices widen refined-scrap spread further
China's refined copper prices increased 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: Price volatility splits copper scrap supply
Spot supply in China's copper scrap market diverged with copper price movements last week. For red copper scrap, spot liquidity visibly improved early in the week as copper prices rose, with holders actively selling especially when prices spiked. However, as prices declined later, market supply tightened again. For brass scrap, even when copper prices were rising and profit margin existed, holders still faced slow sales and high costs to replenish inventories, keeping trading activity relatively limited. After copper prices pulled back, profit margins narrowed and transactions became even more difficult. Overall, spot supply of copper scrap in China remained quite limited last week.
Looking ahead, although copper and copper scrap prices may have some rebound expectations following the late last week decline, the overall price trend is expected to stay weak under macro headwinds. With profit margins narrowing, spot supply in China's copper scrap market is likely to remain constrained.
Demand: Divergent demand limits trading volume improvement
Spot trading volumes in China's copper scrap market remained generally subdued last week. For red copper scrap, while downstream enterprises held low raw material inventories and procurement demand was decent, supply largely gravitated toward higher-bidding firms. In the latter half of the week, constrained by poor sales of finished products and narrowing margins, enterprises slowed purchases. For brass scrap, wide price swings, combined with the traditional consumption off-season, led end-user enterprises to mostly maintain hand-to-mouth procurement. Consequently, downstream enterprises saw limited growth in orders on hand, and most kept raw material inventories low to manage risk.
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
