Davis Index: Market Intelligence for the Global Metals and Recycled Materials Markets

The weekly spreads for US domestic copper scrap grades were unchanged on Tuesday after widening last week on the more robust Comex market.  


Copper scrap supply is outpacing demand. Moreover, some consumers have stepped out of the market in the short term, which could lead to spreads continuing to lose strength. 


The Comex spot market closed at $2.7875/lb on Tuesday, up from $2.7135/lb on June 30, bringing the market within 10¢ of its peak of $2.87/lb for the year on January 14.


The spread for US bare bright copper scrap (barley) delivered US consumer held at 8.3¢/lb weaker, under the July Comex contract on Tuesday, while the weekly Davis Index for bare bright increased by 7.5¢/lb to $2.705/lb delivered US consumer.


The spread for #1 copper (berry/candy) was flat at 15.2¢/lb under the June Comex contract, with the weekly index for the grade rising by 7.5¢/lb to $2.636/lb.


The spread for #2 copper chops remained unchanged at 25.4¢/lb, under the July Comex contract while the index for the grade rose by 7.5¢/lb to $2.461/lb.


Demand is still soft, and with supply increasing, the strength in transactional prices is a direct result of the more robust Comex market. Asian demand, which had fallen off, got a shot in the arm on Tuesday after China announced the ninth batch of quotas for copper totaling over 175,000mt in copper scrap. If Asia’s activity picks up, the supply-demand curve could flip yet again and force domestic spreads to remain flat or even tighten in the medium term.

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