US export copper scrap spreads widened for most grades over the past week while prices jumped by more than 10¢/lb on the strength in the Comex market, which has responded favorably to China’s stimulus package.
The next active Comex contract closed on Wednesday at $3.023/lb, up 13.2¢/lb from $2.891/lb on August 12. The Comex market set a new high for the year, breaking through the $3.00/lb barrier for the first time since June of 2018.
The weekly Davis Index for both #1 copper wire and tube and #2 copper surged by 12¢/lb to $2.82/lb fas and $2.66/lb fas, respectively. The index for bare bright (barley) also increased by the same amount to $2.90/lb fas US port on Wednesday.
The Davis Index spread for #1 copper wire, and tube (berry/candy) was wider by 1.6¢/lb at 20.3¢/lb fas US ports under the next active Comex contract. The spread for #2 copper (birch/cliff) weakened by 1.3¢/lb to 36¢/lb fas US port, under the next active month on Comex, while the spread for bare bright (barley) was worse by 1.1¢/lb at 12.2¢/lb fas under the same contract.
Global demand remains low, but China’s stimulus and a relatively weak US dollar have helped spark a bull run on the Comex, driving transaction prices higher. Market participants expect the spreads to widen further to shore up the price increases against such a strong Comex market, particularly now it has crossed the $3.00/lb threshold—a level that is destined to attract more offers for scrap into the marketplace.