US export copper scrap spreads widened for most grades on Wednesday with China sending mixed signals to the market, and the Comex market losing steam.
The next active Comex contract closed on Wednesday at $2.891/lb, down by 3.4¢/lb from $2.925/lb on August 5. The Comex market has settled below its peak of $2.96/lb on July 21 and has been trading in a range that is 2-10¢/lb lower since then.
The weekly Davis Index for #1 copper wire and tube inched down by 0.6¢/lb to $2.740/lb fas US port, while the index for #2 copper declined by 4¢/lb to $2.54/lb fas on Wednesday. The bare bright (barley) index also decreased by the same amount to $2.78/lb fas US port.
The Davis Index spread for #1 copper wire, and tube (berry/candy) was wider by 0.6¢/lb at 18.7¢/lb fas US ports under the next active Comex contract, while the spread for #2 copper (birch/cliff) was flat at 34.7¢/lb fas US port, under the next active month on Comex. The spread for bare bright (barley) was worse by 0.1¢/lb at 11.1¢/lb fas under the next active Comex contract.
The spreads continued to drift apart on market fundamentals but could have more concerns moving forward. On the other hand, China has found it challenging to find copper scrap suppliers because of the fear of unclear waster restriction for imports into the country and its impact on scrap held up at the ports, according to market participants. Spreads could strengthen again if China re-enters the market.