Trade wars between the US and China continue to shake the global economy. Mutual restrictions, quotas, sanctions, and prohibitions have a great impact on the global metallurgical industry and as well as on the scrap market.
Despite the ever-growing demand for copper, the prices for primary copper and scrap fluctuated significantly throughout 2019. Copper prices reached their maximum in February-March 2019 (6,570 USD per ton). In May 2019, the prices for copper sharply lost their positions on the London Metal Exchange (LME) and reached their minimum of 5,536 USD per ton in September 2019 [2]. During 2019, the difference between the highest and lowest price reached 1,000 USD per ton. Together with the primary copper prices, copper scrap prices also rose and fell in 2019. According to the Bureau of Labor Statistics in the US, the Producer Price Index (PPI) of the copper base scrap in the first and second quarter of 2019 was 418.4 - 446.2. At the same time, in the third quarter and at the beginning of the fourth quarter PPI fell to 388.2 - 384.1 [3].
In September - October 2019, the copper market had slightly stirred. The primary copper price in the world market began to rise. In the wake of it, the demand for copper scrap was renewed. By LME data, the lowest price for copper in the fourth quarter was recorded in October 2019 – 5.598 USD per ton. At the end of the year, the copper price increased to 5.951 USD in November. They reached their maximum level for the 4th quarter in the last few days of December 2019 – 6.183 USD [2].
As for the scrap, in the fourth quarter of 2019, the average range of market prices for the high-quality copper scrap (copper wire) was 3.300-4.800 USD per ton depending on the supplier's country [1].
Table
|
Country |
Price per 1 ton, USD |
|
China |
4.600 |
|
India |
3.500 |
|
Ukraine |
4.100 |
|
USA |
4.800 |
|
Malaysia |
4.800 |
|
Australia |
3.900 |
|
United Arab Emirates |
3.900 |
The data provided by Global Trade Metal Portal shows the average price per ton of high-quality copper scraps for the fourth quarter of 2019 according to https://trade-metal.com/copper-scrap-c584.html.
Today top global copper scrap exporters are the United States, Germany, and Malaysia. The major copper scrap importers are China, Germany, and South Korea. Despite limitations, the vast number of copper scrap is still imported by China.
Undoubtedly, the scrap price on the global market is affected by China's trade policy. It is aimed at a significant reduction in the import of any waste into the country, including metal scrap. The amount of scrap imported into the country is tightly regulated by decreasing quotas from year to year. Moreover, in China, copper scrap requirements are very high.
China plans to allow only high-quality scrap with 95-96% copper content into the country in 2020 that is why the problem of copper scrap sales with low purity will become very acute in the near future. Now copper scrap from the USA and the EU is exported to Malaysia, where it is being cleaned and then supplied to China with better quality. Besides, developed countries are thinking about resuming their own scrap processing.
The copper price at LME in the early days of 2020 is a little higher than 6.000 - 6.100 USD per ton [2]. Copper scrap prices are also preserved. Both primary and scrap copper will be in demand with metallurgical industry in 2020.
Insufficient investments in primary copper mining and global shift to renewable energy which requires copper for its production will increase the demand for high-quality copper scrap.
References
