US export copper scrap spreads widened over the past week as the Comex market kicked into high gear to match its peak for 2020.
The next active Comex contract closed on Wednesday at $2.82/lb, up 9¢/lb from $2.73/lb on July 1. The Comex market peaked in early January at $2.87/lb, before bottoming out at $2.10/lb on March 23.
The weekly Davis Index for #1 copper wire and tube increased by 9¢/lb to $2.67/lb fas US port and jumped for #2 copper by 9.4¢/lb to $2.54/lb fas on Wednesday. The index for bare bright (barley) increased by 8¢/lb to $2.74/lb fas US port.
The Davis Index spread for #1 copper wire and tube (berry/candy) was slightly wider at 15.8¢/lb fas US ports under the next active Comex contract, while the spread for #2 copper (birch/cliff) widened by 0.4¢/lb at 28.4¢/lb fas US port, under the next active month on Comex. The spread for bare bright (barley) was worse by 1.4¢/lb at 8.8¢/lb fas under the next active Comex contract.
Spreads began to widen as the Comex market climb higher over the past couple of weeks and China kept away from the market while waiting on the July 1 reclassification deadline. The reclassification has been pushed back until 2021, in favor of maintaining the current import quota system.
Now that China has released its ninth batch of import quotas allowing for just over 175,000mt of copper scrap into the country, consumers are carefully monitoring scrap flows, mindful to not push too hard and slow down the stream of material that does exist in such a tight supply environment.