US export copper scrap spreads widened for most grades over the past week as low global demand weighs on the market and the Comex market hovers close to its peak for 2020.
The next active Comex contract closed on Wednesday at $2.925/lb, up by 1.5¢/lb from $2.91/lb on July 29. The Comex market has moved in the range of around $2.90/lb since July 10, completing a run that started at $2.56/lb on June 16.
The weekly Davis Index for #1 copper wire and tube was flat at $2.74/lb fas US port, while the index for #2 copper declined by 3¢/lb to $2.58/lb fas on Wednesday. The bare bright (barley) index, on the other hand, increased by 1¢/lb to $2.82/lb fas US port.
The Davis Index spread for #1 copper wire, and tube (berry/candy) was flat at 18.1¢/lb fas US ports under the next active Comex contract while the spread for #2 copper (birch/cliff) widened by 3.7¢/lb to 34.8¢/lb fas US port, under the next active month on Comex. This was the first significant drop seen in the #2 copper spreads since it started to widen out over the past couple of weeks.
The spread for bare bright (barley) was weaker by 0.2¢/lb at 11¢/lb fas under the next active Comex contract.
Spreads continued to drift apart on market fundamentals but have more concerns moving forward. China will lose port service at the end of this month, and India is focusing on only buying domestic copper for consumption for the time being, leaving little in the way of options for copper scrap exporters to sell material. Keeping these factors in mind, August could only be the beginning of a weaker market for the red metal.