US export copper scrap spreads tightened across most grades after the Comex copper market fell by almost 10¢/lb on Wednesday.
The next active Comex contract closed on Wednesday at $3.55/lb down from $3.64/lb on Jan 20. The market had reached a peak of $3.70/lb on Jan 7.
The weekly Davis Index for #1 copper wire and tube fell by 1¢/lb to $3.33/lb fas US port. The #2 copper index stepped down by 12¢/lb to $3.070/lb fas on Wednesday, while the bare bright (barley) index dropped by 3¢/lb to $3.43/lb fas US port.
The Davis Index spread for #1 copper wire, and tube (berry/candy) narrowed by 5.1¢/lb to 21.9¢/lb fas US ports under the next active Comex contract but widened for #2 copper (birch/cliff) by 2.5¢/lb to 48¢/lb fas under the same contract. The spread for bare bright (barley) strengthened to 12¢/lb fas under the next active Comex contract, narrower by 3.8¢/lb.
The US copper export market is filled with exporters looking to fill volumes in anticipation of copper scrap exports to Asia, especially to China, rising after the latter comes off its New Year Holiday break in mid-February. Market participants, however, remain cautious about the #2 copper grade, which still faces an uncertain future in the export market. The interest from suppliers has tightened the export spreads for copper scrap.
Asian buyers, on the other hand, have slowed down their activity over the past week. Moreover, buyers are adopting the wait-and-see approach especially after today’s fall in Comex in anticipation of a shake-up in prices in the hopes of striking deals at lower rates.