India: Domestic, imported copper prices edge down w-o-w tracking global cues

Domestic copper armature prices were assessed at INR 742,000/tonne ex-Delhi, down 1.5% w-o-w, while copper motors mix scrap prices remained firm w-o-w.

Secondary continuously cast rods (CCR) (99.90%) were assessed at INR 788,000 per tonne (ex-Delhi), reflecting a 2.1% weekly decline. Meanwhile, primary CCR prices fell 1% to INR 805,000/t.

A producer noted that the copper market remains subdued, as semi-finished product manufacturers have reduced their purchasing activity. Many have secured adequate material stocks before Diwali and are now delaying further buys, anticipating potential price declines. The current cautious approach reflects a wait-and-see sentiment in the market.

On the imported side, prices have softened, tracking declines in London Metal Exchange (LME) prices. However, with Western countries entering holiday mode from the third week of December, supply is expected to tighten. This anticipated supply constraint could lead to a price rebound after the holidays.

Market activity has largely been driven by need-based purchases, with mills reducing procurement as the year-end draws closer.

Global copper market overview

The three month LME prices were at $8,980/t, down 1.2% w-o-w.

A source said: "Thailand currently offers more competitive pricing for copper, particularly for copper motors, with rates approximately $50-60/t higher than in India. Favourable freight costs from Australia to Thailand are also encouraging Australian suppliers to prioritize shipments to Thailand, leveraging both better pricing and reduced logistics expenses".

Another source informed: "Market activity remained subdued last week, with several traders stepping back after achieving their annual sales targets in the spot market. While trading may see an uptick in December for deliveries in the new year, expectations for a substantial rise in prices remain low. Many trading houses are likely to focus on clearing inventories as part of year-end financial practices".

China's refined copper output falls

China's refined copper output in October fell 2% month-on-month and 1.3% year-on-year to 1.116 mnt, driven by production suspensions and maintenance at key smelters, including Daye's Yangxin Hongsheng facility. Despite this decline, cumulative output for January-October 2024 rose by 4.5% year-on-year to 11.2 million tons, reflecting robust production earlier in the year.

China's copper scrap imports increased by 14.2% in October month-on-month, fueled by strong seasonal demand and the resumption of operations at secondary processors. Additionally, a shift by refined copper producers towards using copper scrap over pricier copper concentrate drove a 19% rise in imports during January-October.

Chinese copper concentrate treatment and refining charges (TC/RCs) remain under pressure, reflecting limited trading activity as the market awaits the 2025 benchmark TC outcomes.

Vedanta mulls Saudi investment

Vedanta is planning a $2 billion investment to establish copper processing facilities in Saudi Arabia, supporting the kingdom's vision of becoming a global hub for metals and mining. The company, announced plans to construct a state-of-the-art smelter and refinery with an annual capacity of 400,000 metric tons. Additionally, Vedanta aims to set up a facility capable of producing up to 300,000 tons of copper rods per year, a critical component in electric cable manufacturing.

Outlook

Domestic copper prices are expected to remain steady with minimal fluctuations, as current buying activity is primarily need-based. On the international front, attention is focused on the upcoming removal of China's export tax rebates on copper and other commodities, effective December 1, 2024, alongside potential supply-side impacts as western countries enter holiday mode.