China's copper scrap demand is being depressed by high prices and import losses, according to Mysteel's survey. However, overseas markets are still optimistic about China's economy and consumption, which has led to a serious accumulation of imported copper scrap inventory in China, especially in Ningbo, Zhejiang province. So, Mysteel led an on-site investigation on March 16-17.
According to this survey, copper scrap traders in Ningbo generally hold high inventories, even though some of theirs are 30% higher than the usual level after consumption.
Firstly because traders imported much copper scrap with high costs before the Spring Festival when the overseas market was optimistic about Chinese copper scrap demand in 2023, but losses intensified after the Festival due to the import price ratio shift, and traders would not like to sell.
In addition, the slow recovery of consumption in downstream industries and the hidden domestic copper scrap inventory reflected by the rise in copper prices are also reasons why imported copper scrap is difficult to consume.
Transactions of imported copper scrap have not significantly improved, especially brass scrap, though import losses have narrowed since mid-March and downstream processing enterprises received more orders. It is expected that China's imported copper scrap inventory will gradually be destocked by the beginning of April. However, the substantial improvement in demand still depends on the recovery of the real estate industry.
Survey of Copper Scrap Enterprises in Ningbo |
|
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Enterprises |
Types |
Trade Volumes (t/month) / Capacity (t/year) |
Utilization Rate |
|
Order Status |
Viewpoints |
|
Raw Material Inventories |
Finished Products Inventories |
||||||
A |
Import trader |
1,500 |
- |
Still 40-50% higher than the same period of last year |
Without a strong willingness to sell due to loss of import, and downstream demand sluggish |
Estimates copper scrap imports may decline by one-third in March |
|
B |
Import trader |
3,000 |
- |
2.5kt, above usual level |
Customers not willing to purchase imported copper scrap due to inappropriate price ratio |
Downstream enterprises still waiting and not eager to purchase due to import loss |
|
C |
Import trader |
8,000-10,000 |
- |
6kt, 30-40% higher than usual level |
Less procurement from customers |
Copper scrap imports will increase slightly in 2023 |
|
D |
Processing enterprise & import trader |
200,000 |
70-80% |
Slightly increases |
More than 50% higher than usual level |
Not significantly affected |
Economic environment not ideal, but enterprises can still achieve order growth by optimizing product portfolio |
E |
Processing enterprise & import trader |
- |
80% |
Above usual level |
- |
General |
Demand will continue to improve in March, but with slow progress |
F |
Processing enterprise |
- |
90% |
Usual level |
Usual level |
Has significant improved since March |
Current supply is relatively loose but will change by improved demand |
Data Source: Mysteel |
If you would like to join such on-site surveys, please do not hesitate to contact Paula Xu at xuzhongping@mysteel.com
Written by Edenlis Huang, huangting@mysteel.com
Edited by Paula Xu, xuzhongping@mysteel.com