The weekly spreads for US domestic copper scrap grades continue to widen by the smallest margin against weak demand and better supply.
The Comex spot market closed at $2.89/lb on Tuesday, down from $2.90/lb on July 28. After reaching its peak at $2.96/lb in early July, the Comex market has remained in a tight 7¢/lb range.
The spread for US bare bright copper scrap (barley) delivered US consumer, was weaker by 0.3¢/lb at 10.2¢/lb, under the July Comex contract on Tuesday, while the weekly Davis Index for bare bright decreased by 1.3¢/lb to $2.788/lb delivered US consumer.
The spread for #1 copper (berry/candy) widened by by 0.1¢/lb to 16.4¢/lb under the July Comex contract, with the weekly index for the grade declining by 1.1¢/lb to $2.726/lb.
The spread for #2 copper chops was worse at 28.5¢/lb, down by 0.3¢/lb under the July Comex contract, while the Davis Index for #2 chops decreased by 1.3¢/lb to $2.605/lb.
Consumers, who could have pushed the spreads wider were not heavy-handed. Despite supply being better than demand, the former is much lower than in previous years and is down by as much as 50pc in some areas of the country. Widening the spreads too much could trigger suppliers into hoarding scrap again, and ultimately create a volatile trading environment that hurts both sides of the trade. For now, there seems to be enough margin, at least at the unit level, to keep market participants from pushing too hard against one another.