Copper Scrap
Copper prices in China have plummeted significantly, with scrap copper prices following, which has suppressed the market confidence, so upstream holders sell cautiously but inquire positively to purchase. Under this situation of continuously tightening supply, downstream copper producers, especially those with low willingness to reserve, become more difficult to purchase raw materials and have to purchase on-demand with luck.
Brass scrap holders would like to restock at currently low prices to lower the average price of products in hand, however, there are barely any spots for supplying in the market with low prices, so the trade is light. Meanwhile, orders for downstream copper producers also decline, so the demand for raw materials also weakens. In addition, some producers are under maintenance and will recover to purchase after the Labor Day holiday. So, the copper scrap trading is weak recently.
Looking forward to the near term, the supply and demand will be more balanced, and China's domestic and global macro economy will weigh more on the copper price trend.
Secondary Lead
The supply of waste batteries is still tight, so there is still room for price increases in the short term. However, the price of secondary lead remains stable, which shortens producers' profits. The production of secondary lead in China is expected to reduce to 329.7kt in April since the affected output by maintenance exceeds the increased output by resumption.
Aluminum Scrap
The Federal Reserve's Meister stated that current inflation is still too high and supports further interest rate hikes to above 5%. In addition, aluminum smelters in China accelerate production resumption due to expanding profits on high aluminum prices. Meanwhile, aluminum scrap holders held the inventory but didn't sell due to falling prices in March, while downstream producers are not willing to purchase with declining orders and high raw material inventory, resulting in a large supply of aluminum scrap in the market at present. Overall, the traditional peak season in March-April had ended in advance, with such weakened support from fundamentals, the aluminum scrap price is expected to be weak and fluctuate in the current range.
Steel Scrap
At present, steel mills are to optimize procurement of raw materials to reduce costs and balance losses caused by the continuous decline in finished product prices, so they choose to reduce the production time and the proportion of steel scrap entering furnaces, resulting in a continuous decline in steel scrap demand. However, the resource circulation is likely to tighten since the waste output from infrastructure and manufacturing industries has declined and the transferring speed of steel scrap from traders' inventory to steel mills has slowed down. In addition, some steel mills are likely to restock raw materials before the Labor Day holiday. So, it is expected that steel scrap prices will fluctuate and be weak with a limited decline in the short term.
Written by Paula Xu, xuzhongping@mysteel.com