China actively procuring from Pakistan, Australia.
India's demand muted, sales may rise ahead of Diwali
The three-month LME copper prices dipped 2% w-o-w to $9,510/t, followed by imported prices. However, domestic markets held steady. Prices have been falling for the last two weeks and inventories in LME warehouses decreased by 10,000 t to 288,750 t this week.
Price trends
BigMint's assessment of USA origin copper motor mix were at $1,150/t, a fall by $20/t w-o-w.
Copper clove: 99.99% from Australia to CIF China was priced at 97% of LME levels. The 98% from Australia to CIF China, was at 95.5% of LME.
Druid scrap: Druid scrap, the second-most imported copper scrap type after brass honey, is currently traded at:
- 93% of LME for high-quality material.
- 91% of LME for mid-grade material.
Domestic copper market remains dull
Domestic copper armature prices were assessed at INR 758,000/tonne ex-Delhi, a slight increase of 1% w-o-w, while imported scrap prices decreased by up to 1.7% w-o-w. The fall in prices comes in the wake of copper futures on the London Metal Exchange (LME) slowing down after hitting a three-month high recently.
Steady scrap supply despite price drop:
A manufacturer noted that despite range-bound levels in local prices, the scrap supply remains stable. Yard owners in the western and northern regions have preserved their stockpiles from the monsoon season, ensuring adequate availability.
Prices of secondary continuously cast rods (CCR) (99.90%) were at INR 810,000/t ex-Delhi, range-bound w-o-w. Meanwhile, primary CCR prices stood at INR 845,000/t, down by 1.2% w-o-w.
A producer stated, "Copper semi-manufacturers have slowed their purchasing activities after securing enough materials post-monsoon. With sufficient stock for production, they are waiting for prices to drop further before making additional purchases."
Global copper market overview
Copper demand in India continues to be relatively muted, while China has become more active in copper procurement, especially from sources like Pakistan and Australia. This shift in China's activity has drawn attention across markets.
China's aggressive buying has led many sellers to prioritise exports to China due to better price realisations compared to India. Taiwan and Korea are also striving to compete with China, but its dominant presence in the market is making it a preferred destination for copper exports.
Market participants informed BigMint: "A number of exporters in India are exploring opportunities to start exporting burnt copper, which is readily sourced from old telecommunication wires. This material's accessibility makes it an attractive option for expanding copper exports."
Current payment trends in copper exports
Currently, Taiwan, Korea, and China are the leading destinations for copper cable exports, driven by their efficient payment systems. Payments are generally made upon loading, providing exporters with faster financial settlements amid the ongoing demand.
Meanwhile, India has been delaying payments, with transactions typically finalised after the shipment's arrival. In China, particularly for motors, payments are being made only after the copper content is sorted and verified, reflecting a more cautious approach in the current market scenario.
China market overview
Refined copper production is expected to decline in Q4 2023, following a fire at Daye Nonferrous Metals' 400,000 t per year Yangxin Hongsheng smelting complex in Hubei province on 14 September. Operations are expected to remain suspended for 2-3 months.
Smelters with a combined capacity of 1 mnt per annum are set to undergo maintenance this month, which is expected to reduce October's refined copper output by 2-3% compared to September, as per sources.
Imported copper prices and deals
- Millberry USA: 98.5-99% CIF Mundra
- Millberry Australia: 99% CIF China
- Millberry UAE: 98%
- Copper Motors Australia to CIF Mundra: Mixed material at $1,120/t
- Copper Motors Australia to CIF Pakistan: Mixed material at $1,200/t
- Meatballs 20% US to CIF Vizag: $1,860/t
- Meatballs 20% Australia to CIF Chennai: $1,850/t
- Candy Berry Australia: 97%
- Candy Berry US: 96.5-97%
Talk scrap prices
- Australia to CIF Chennai: 52.5%
- US Talk: 53.5%, offered at 54%
- UAE Talk: 48.75%
- Australia Birch Cliff (94% purity): Traded at 95% LME CIF Mundra
- US Birch Cliff Offers: 95%, US Birch Cliff bids from India: 93%
- Malaysia Talk: $5,350-5,400/t (indicative)
Other copper deals
- Copper Candy Berry from Australia to CFR Mundra: 97% LME
- Copper Brass Honey (2%) from Australia to CFR Mundra: 60.5%
Outlook
The demand-supply balance remains stable, but recent fluctuations in LME prices have pushed up offers temporarily. Now that the rally has eased, procurement can resume ahead of Diwali.
Supply cuts and economic stimulus policies in China are expected to support global copper prices in the near term.
