Metalnewsnet 15 Mar:

LME copper continued to remain quiet last week, with the price fluctuating narrowly around the level of 7,400—7,500 dollar/ton. From insiders, the mixed data is the main contributor to the market response. First of all, China imported 322,282 tonnes of unwrought and semi-finished copper products in February, up 10.3 percent from a month ago, the Customs announced Wednesday (March 10). The imports of copper scrap also reached 280,000 tonnes. It was 340,000 tonnes in January. It is well-known that China’s Lunar New Year holidays are in February this year. The surprising increase in the imports of unwrought and semi-finished copper products in February therefore can be read as that China’s demand is recovering. Meanwhile, inventories of the metal are also falling. The lower stockpiles also indicate, from another prospect, copper demand is improving. Secondly, however, the consumer price index (CPI), a major gauge of inflation, rose 2.7 percent in February, the highest in more than 16 months, the nation’s statistics bureau reported Thursday (March 11). And, producer price index (PPI) jumped by 5.4 percent in February, the bureau reported. Copper soon started declining after the announcement as investors feared China may continue to tighten the monetary policy to fight against the rising inflation pressure. Shanghai copper futures presented the weak trend all last week. In other words, when LME rose, it didn’t run as high as the expected; while when LME dropped, it followed closely. The soft copper futures weighted to some extent spot copper market at home.

Generally speaking, copper scrap market at home will always become hot since March, the traditional peak season for sales. But it doesn’t this year. The market performance still remains far from satisfactory this March, from market research. On the one hand, worker shortage is the headache problem troubling many enterprises this year. The operating rate in many local copper enterprises still stays at a relatively low level at present. Many market players said the peak days for sales may be delayed to April or even May this year. On the other, the pressure on liquidity in many local copper scrap recycling companies is getting higher now. Why? First, some recycling companies already delivered several batches of the goods to the users. But most those users prefer paying Terminal Receiving Charge (T.R.C.) to taking the delivery, hurt by tight liquidity. In this case, a large amount of the funds (in recycling companies) are caught tightly. Second, many recycling companies still stockpiled a huge amount of the metal (copper scrap) in the warehouse. Many they are reluctant to do sales at current price on bright demand prospects and improving global economies. The move also curbs largely their liquidity.

From the sources, local copper scrap supplies still remain relatively sufficient at present and recycling companies hold most inventories of the metal. Some get about 300—400 tonnes, while some even have more than 700 tonnes. “Most we are already tired of March, the traditional peak seasons for sales, this year. We are waiting patiently that those consumers’ fund can get loose soon. We also hope copper price can rise strongly in April and May.”, an officer from local recycling company said to the author this morning. (Source: Lingtong Metal Information)
 

Editor: KylinTse