Latest Update in the China Copper Scrap Market

SMM data showed that China’s copper cathode output stood at 870,000 mt in December 2022, down 3.3% from the previous month and flat from the same period in 2021. The actual output was 17,900 mt lower than the expected 887,900 mt. The output totalled 10.28 million mt in 2022, up 3.07% or 306,200 mt year-on-year.

The recycling amount of battery scrap was limited as the traders were affected by the pandemic outbreak.

Driven by easy economic policies and strong downstream market demand, China's steel industry has maintained continuous growth in the past five years. During the 13th Five-Year Plan period, the compound growth rate of China's crude steel production reached 7.2%, and the annual output peaked at 1.07 billion mt in 2020.

China produced 899,600 mt of copper cathode in November, down 0.2% MoM but up 8.9% YoY. The output was 3,700 mt lower than the expectation of 903,300 mt. The output totalled 9.41 million mt from January to November, up 3.37% or 306,500 mt year-on-year.

On the whole, steel mills still had demand for coke, but the poor profits of some steel mills compelled them to cut the production. Therefore, the tight supply eased.

From September 19 to 25, the copper scrap throughput in East China Nonferrous Metals City was about 29,400 mt, a week-on-week increase of 18.88%.

For the frenzying increase in discount rates and prices in recent months, SMM believes that it is the combined effect of the imbalance between supply and demand as well as the outdated pricing scheme.

From August 22 to August 28, the copper scrap throughput of East China Nonferrous Metals City was about 22,000 mt, a week-on-week increase of 29.15%.