Copper Prices Soar, Scrap Utilization Enterprises Hesitant to Buy

Copper prices surged to 108,620 yuan/mt by the end of trading on August 11, marking an increase of 850 yuan/mt from the previous day. Despite the rise in copper prices, the average spot premium decreased by 20 yuan/mt month-over-month (MoM) to 60 yuan/mt. The price of copper scrap remained steady MoM, while the copper scrap sales sentiment index rose to 2.77 and the purchase sentiment index fell to 1.86.

The price spread between copper cathode and copper scrap widened by 830 yuan/mt MoM to 5,234 yuan/mt, with the price difference between copper cathode rod and secondary copper rod standing at 2,080 yuan/mt. According to an SMM survey, copper prices have been consistently high over the past two weeks, prompting scrap utilization enterprises to purchase copper scrap from the market. However, due to the current high copper prices, these enterprises' willingness to purchase was extremely weak.

Given their ample raw material inventory, scrap utilization enterprises are reluctant to invest in additional purchases at the current price level. The SMM survey reveals that this trend is likely to continue, with copper prices expected to remain high for the foreseeable future.