Price: Weak copper scrap market widens refined-scrap spread
The price center of refined copper in China edged up slightly last week. Copper scrap prices followed, but with both supply and demand in the scrap market weak, the increase was smaller than that of refined copper, causing the refined-scrap copper price spread to widen.
Looking ahead, copper prices are expected to remain elevated in the near term, and copper scrap prices are likely to track copper price movements. However, given the persistently weak scrap market, the refined-scrap copper price spread may still have room to widen.
The weekly average import prices for red copper scrap (99%-99.5% Cu) in China decreased slightly last week, mainly due to slowing market consumption. Meanwhile, as domestic and overseas copper scrap prices fluctuated, China's copper scrap import margins remained deeply negative, ranging from -Yuan 1,461.13/tonne to -Yuan 960.45/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.
Data Source: Mysteel
Supply: Tight holdings and low selling interest keep copper scrap supply tight in China
Spot supply in China's copper scrap market remained tight last week. In the red copper scrap segment, upstream holders, wary of high prices, were reluctant to restock at elevated prices. With inventories already low after previous sales, they sold only limited volumes, mainly to deliver against earlier orders. In the brass scrap segment, frequent price fluctuations squeezed traders' profit margins, and elevated raw material prices made downstream enterprises reluctant to purchase, further dampening upstream traders' willingness to buy and sell. As a result, spot supply in China's copper scrap market was tight last week. Looking ahead, traders are likely to remain cautious in the near term amid tax policy uncertainty, with limited willingness to stockpile at high prices. The overall low inventory level across the industry is therefore expected to keep spot supply from improving significantly.
Demand: Spot trade volumes decline WoW
Trading volumes in China's copper scrap market declined week on week last week. In the red copper scrap segment, policy uncertainty weighed on downstream production willingness, keeping operating rates relatively low and acceptance of high-priced feedstock sluggish. Most processors purchased flexibly based on order volumes to avoid losses. In the brass scrap segment, persistently weak end-user demand and elevated copper scrap prices dampened downstream production enthusiasm, leaving raw material procurement relatively subdued.
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
