Price: Larger declines in copper scrap prices widen refined-scrap spread
China's refined copper spot prices decreased slightly last week, while copper scrap prices followed the decrease but the declines were larger due to sluggish spot market trading, widening the refined-scrap copper price spread further.
Looking ahead, refined copper prices are expected to trade mostly range-bound in the near term. Copper scrap prices, weighed down by weak supply and demand, are likely to be less resilient than refined copper, keeping the refined-scrap price spread elevated in the short run.
Data Source: Mysteel
The weekly average import prices for red copper scrap (99%-99.5% Cu) in China decreased slightly last week, following the decline in copper and copper scrap prices. Meanwhile, as domestic and overseas copper scrap prices fluctuated, China's copper scrap import margins remain deeply negative, ranging from -Yuan 1,356.42/tonne to -Yuan 439.93/tonne.
Looking ahead, import demand is expected to persist as the impact of domestic tax policies on the sector continues, but a sharp further increase is unlikely in the near term given poor margins.
Supply: China copper scrap spot supply remains tight
Spot copper scrap availability in China was tight last week. For red copper scrap, downstream buyers consistently depressed purchase prices, squeezing upstream traders' margins and weakening their willingness to sell, which kept spot availability tight. For brass scrap, the industry was in its traditional consumption off-season, and most upstream dealers maintained a strong risk-control stance with limited restocking interest, resulting in limited available sources.
Looking ahead, copper prices are expected to shift higher, pulling copper scrap prices up as well and providing a temporary boost to holders' selling appetite in the near term. However, amid persistent invoice-related issues and the off-season demand, a significant and sustained increase in copper scrap availability is unlikely.
Demand: High prices and limited order growth curb copper scrap purchases
China's copper scrap market trading volumes fell week on week last week. For red copper scrap, downstream firms were weighed down by the consumption off-season, with production and sales under pressure, leaving most with limited enthusiasm for restocking raw materials. Meanwhile, although the refined-scrap copper price spread remained wide, invoice-related constraints hampered finished product sales, further weakening overall raw material purchasing appetite. For brass scrap, persistently high raw material prices and a lack of improvement in new end-user orders kept copper scrap procurement cautious overall. As a result, Mysteel surveyed companies' copper scrap purchases declined week on week last week.
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 copper scrap 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!
Written by Zhaorui Cui, cuizhaorui@mysteel.com
Edited by Mingyuan Wang, wangmingyuan@mysteel.com
