India: Copper rods, scrap prices fall w-o-w as LME hits 4-month low

BigMint's assessment of domestic copper armature prices have been reported at INR 720,000/t, exy-Delhi, falling w-o-w, reflecting a decrease of 3.2%. Notably copper prices in the futures market of London Metal Exchange (LME) have hit 4-month low levels i.e. down to $8,750/t levels recently.

Prices of secondary CCR rods (99%) were at INR 764,000/t ex Delhi, falling by 3.4% w-o-w. Meanwhile, primary CC rods were observed at INR 788,000/t, down by 3.6% w-o-w. Imported scrap prices have decreased by up to 2.5% w-o-w.

LME prices hit 4-month low, stocks at 2.5-year high

Three-month LME copper prices hovered at $8,750-8,760/t, falling by 4% w-o-w. Stocks at LME-registered warehouses stood at 294,750 t which is at two-year high levels. Copper prices are hovering at multi-month lows.

High inventories in exchange-approved warehouses are weighing on the market, with LME copper stocks more than doubling since early June and reaching their highest level in almost three years.

The increase in LME copper stocks reflects weak Chinese demand as majority of the stocks is from China in LME warehouses, as per reports.

Demand on the lower side amid seasonal impact, LME plunge

Demand for secondary continuous cast copper rods (CCR) remained dull in the western and northern markets on seasonal impact amid ongoing monsoon. However, reports suggested that talk scrap is experiencing variations with trades observed at 53- 53.5% of LME prices for USA-origin material to CFR Mundra, and 52-52.5% from Australia to Chennai.

Northern-based mills are offered Malaysian talk scrap at approximately $5,300-5,400/t, while UAE-origin talk scrap faced a bid-offer disparity of 0.5-1%, with material offered at 51% LME prices.

Copper motor mix scrap prices are being offered at $1,200-1,250/t by sellers based in the EU and the US. However, these prices seem to be higher than the bids currently being placed.

Notably, buyers from Pakistan and the Far East are placing bids that exceed those from Indian buyers by $50-60/t. This discrepancy highlights a competitive edge for Pakistan, India and Far East buyers in securing copper motor scrap at present rates.

A seller source stated: "copper scrap availability is stable, with no current shortages. However, in the northern region, buyers have already stocked up before the monsoon and are not in a rush to purchase, keeping the market slow. In contrast, the western region is actively procuring talk material, which is favoured over armature due to better labour facilities and its widespread use."

Trades were recently heard for small copper motors from the US. Trades were at $1,225-1,250/t CFR Qasim.

However, sellers remained cautious about exporting material due to the low futures prices, preferring to rely on local selling until the price stabilises.

BigMint's assessment of USA-origin talk scrap was at $4,620/t, 3.4% w-o-w fall, Middle East-origin largely from the UAE prices were recorded at $4,460/t, down by 2.6% w-o-w.

Imports of copper scrap

Imports of copper scrap into India saw a dip of 7% y-o-y in the first half of 2024 (H1CY'24) to around 135,000 t from 145,500 t seen in the same period in calendar year 2023 (CY'23), as per data collated by BigMint.

Recent offers, deals for the week

• Brass honey Australia 2% was at 62% LME CFR Chennai.
  
  
• Australia talk sold to CIF Chennai at 52.5% LME.
  
  
• EU brass honey (5-6%) is offered at 58-58.25% CFR Mundra.
  
  
• Mixed copper motors from the US were heard at $1090-1140/t CFR Mundra.
  
  
• Mixed copper motors from the UK were traded at $1160/t CFR Pakistan.
  
  
• Alternator starter from Europe was heard at $1,900/t CFR Mundra.
  
  
• Large motors from the UK and the US were heard at $1,000-1,050/t CFR Mundra.
  
  
• Millberry from the US was heard at 99.25-99.5%. Millberry from the UAE was at 99% CFR Mundra.
  
  
• Burnt copper from the US was heard at 93-93.5% CFR Mundra.
  
  
• Candy berry from the US was heard at 97.5% CFR Mundra.
  
  

Outlook

It is expected that copper prices in local market will rebound in the near term, suppliers holding stocks may soon start releasing it once the holiday week passes. However, LME plunge may still have impact in the near term.