US export copper scrap spreads narrowed on Wednesday on low supply, but it was not enough to offset the drop in the Comex market as transactional prices declined.
The next active Comex contract closed on Wednesday at $2.38/lb, down by 8¢/lb from $2.46/lb on May 20.
The weekly Davis Index for #1 copper wire and tube decreased by 5¢/lb to $2.25/lb fas US port, while the index for #2 copper dropped by 7.4¢/lb to $2.10/lb fas on Wednesday. The index for bare bright (barley) decreased by 0.7¢/lb to $2.31/lb fas US port.
The Davis Index spread for #1 copper wire and tube (berry/candy) was tighter at 11.4¢/lb fas US ports under the next active Comex contract, while the spread for #2 copper (birch/cliff) contracted by 1.5¢/lb to 27.6¢/lb fas US port, under the next active month on Comex. The spread for bare bright (barley) narrowed to 7.6¢/lb fas under the next active Comex contract, better by 0.7¢/lb.
Demand from China and its new supply chain routes through southeast Asia is squeezing the spreads for the copper market. Scrap supply is still tight and should force US domestic consumers to bring in the spreads to continue to encourage scrap flow against such a volatile Comex. The Comex market started the month at $2.31/lb and reached a peak of $2.46/lb with positive increases of $0.10-0.13/lb only to be offset by drops of $0.08-0.07/lb.