Now the Chinese Lunar New Yearholiday has ended, the typically ravenous scrap consumers from that nation areexpected to resume buying, scrap supply will tighten and consumers will turnback to cathode.Īlso, warmer temperatures are likely to usher in brisker business, thecathode consumer predicted, which he said might narrow the current premiumrange of 4.5-6.5 cents "based on delivery points," to a more typicalhistorical range of 5.5-6.5 cents.Īnother cathode consumer also noted the current market lethargy. "Everybody's trying touse as much scrap as possible so the cathode market is sort of dead."īut, he said: "That, too will pass," as market conditions that keptcopper scrap in ample supply start to shift. "There's still wide scrap spreads," a buyer said. The Platts assessment for New York dealer copper cathode premiumsremained at COMEX plus 4.5 cents-5.5 cents/lb this week, where they settled atthe beginning of the year. "So what we might actually see is a supercharged recovery in the copper price this year, but actually next year we could see the prices more or less stabilize because this unique impact of Covid-19 and the dislocation to the scrap market suddenly is absent.Receive daily email alerts, subscriber notes & personalize your experience. "What you could suddenly see is a slowdown in demand for cathode," he said. "And while demand in the rest of the world is quite weak, you would hope that eventually - it might take until the fourth quarter - you'd see some stabilization and signs of recovery."īut while investors may be tempted to assume "it's just going to be a one way bet going up from here," copper price rises could be limited if copper scrap supply bounces back and Beijing eventually allows some scrap to be imported. "So Chinese demand looks like it's going to continue to increase and stay strong for the second half of the year," he predicted. Barnes said this meant the country was likely to continue aggressively buying copper concentrates, which are imported directly from mines to process domestically, as well as cathodes, a purer form of the metal. Of course, if we see the second wave of Covid-19, all bets might be off."Ĭhinese authorities have been slow to implement plans to reclassify certain higher-quality copper scrap products as "resource" rather than "waste," making them exempt from bans on the importing of some scrap metals. "I think for the balance of this year, it's very likely that we'll continue to see an upward movement in the copper price. "What this points to is a big cathode-replacing-scrap effect in the overall market, and this is really, I think, one of the main reasons why we've seen this unexpectedly quick recovery in the copper price, particularly for the past month," Barnes said. Secondary copper, particularly copper scrap - which makes up one third of the overall market - had been hit even harder by the crisis, he said, estimating that global trade of copper scrap had fallen by around 30% in the first half of 2020.Ĭhina, which makes up around half of global demand for copper, had boosted imports of copper cathode in order to make up for a shortage of scrap metal. The pandemic's impact on production of newly-mined material was "just grazing the surface," Barnes added. But this year, he said, "it looks as though it's going to be much more substantial." Noting that mining giants BHP Billiton and Codelco had already warned production at their sites would be slowed by the pandemic, Barnes explained that supply issues were generally a feature of the copper market due to unforeseen problems that impact primary production. Speaking to CNBC over the phone, he said it was "almost inevitable" that copper markets would continue to see more disruptions to production this year. Jonathan Barnes, senior copper analyst at Roskill, agreed that copper prices would be influenced by continued pressure on supply in the coming quarters. Personal Loans for 670 Credit Score or Lower Personal Loans for 580 Credit Score or Lower Best Debt Consolidation Loans for Bad Credit
0 Comments
Leave a Reply. |
Details
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |