Copper prices recovered last week as overseas macroeconomic risks eased and expectations of interest rate hikes decreased. Shanghai Futures Exchange (SHFE) copper price increased by Yuan 1,320/tonne or 1.94% week on week to Yuan 69,400/tonne, while the price of HPb59-1 brass rod in China increased by Yuan 500/tonne or 1.02% week on week to Yuan 49,300/tonne as of March 29.
Data Source: Mysteel
The rise in copper prices has also stimulated demand expectations for copper bars in China. Traders and processing enterprises actively purchased brass scrap as raw materials last week. However, due to the still sluggish downstream consumption and the still accumulating inventory of imported brass scrap, the slack in the supply side has not been completely alleviated.
The production and sales of Chinese copper bar processing enterprises remained stable, and there is no retaliatory growth during the consumption peak season and after the end of the epidemic. Falling copper inventory in China will support prices. But there are no significant price advantages of brass bars with scrap brass as raw materials, and most downstream enterprises are willing to purchase refined copper rods and copper bars instead. In addition, downstream and end-user industries recover slower than expected, which suppresses the overall demand for copper bars in China. So, copper bar prices are expected to continuously fluctuate at a high level but the price rise space of brass bars is limited.
Written by Edenlis Huang, huangting@mysteel.com
Edited by Paula Xu, xuzhongping@mysteel.com