- New production facilities in India boost domestic demand
- Global scrap prices rise amid improved demand from China
India’s domestic copper scrap prices headed north this week. Copper armature scrap was assessed at INR 795,000/tonne (t) ex-Delhi, up 1.5% w-o-w, while motors mix tags moved up w-o-w to $1,200/t. This followed a rise of $320/t w-o-w in London Metal Exchange (LME) futures, to over $9,600/t.
Secondary continuously cast rods (CCRs) (99.90%) were assessed at INR 857,000/t ex-Delhi, reflecting a 1.7% w-o-w increase. Meanwhile, primary CCR prices rose by 2.3% to INR 890,000/t.
Domestic market
A source noted, “A major copper player in Kutch has started procuring scrap, especially Millberry, from local markets along with overseas. Amid this increased procurement from local markets, the demand for copper has gone up, and it is expected that the company will start asking for more grades, such as Birch Cliff.”
A trader stated that the local market is seeing increased trading activity despite the sharp rise in LME prices, though buyers are still bidding lower. Some yard owners initially held back their stocks due to these lower bids but chose to sell when LME prices hit $9,200/t, locking in good returns. As offers climbed higher, they resumed destocking, continuing to secure strong profits.
Earlier, activity in the local market was largely driven by need-based purchases, with mills scaling back on procurement. However, demand has now improved with the announcement of new plants and facilities, leading to a more optimistic market scenario.
Budget’s removal of customs duty on copper scrap to boost material inflow
The FY’26 Union Budget’s removal of customs duty on copper scrap and an allocation of around INR 1,500 crore for critical mineral recycling under the National Centre for Mineral Materials (NCMM) will enhance domestic scrap inflow. This move will help strengthen recyclers’ operations, promote a circular economy, and boost copper production, reducing reliance on mined copper ore for refined copper.
Global copper market overview
In recent times, China has been offering more competitive pricing for copper, especially for cables. This week, tradable values for copper druid scrap in China were at 94.5% of the LME rate – 2-3% higher than India – which was supported by favourable freights from Australia. Given higher demand in China and Thailand, Australian scrap suppliers prioritised shipments to these regions over India.
Recent deals include Copper Druid scrap from Australia delivered to CFR Chennai, with high-grade material priced at 94% of LME, mid-grade at 92%, and low-grade at 88%. Additionally, Candy Berry (Australia, 97%) was sold to China at 98% of LME rates, while Birch Cliff (92% LME) also found buyers in China at competitive prices.
This increased activity, along with the news of new smelters and refiners entering the Chinese market, drove copper prices higher for both imported and domestic markets, with demand staying robust.
Additionally, some Indian players have been exploring overseas markets, particularly for burnt copper.
Global refined copper production rises
The International Copper Study Group (ICSG) recently unveiled preliminary production figures for CY’24 (January-December 2024), showing that global refined copper output increased by 4.2%, with both primary (electrolytic and electrowinning from ores) and secondary production (from scrap) up by 2%.
Global refined copper production shows regional variations
In the DRC, production rose 17%, while Chile saw a drop of 6.5%, and the European Union (EU) experienced a decrease of 2%. Japan’s production increased by 5%, while the United States (US) recorded a growth of 2.4%.
Outlook
Domestic copper prices are expected to stay strong, driven by LME crossing $9,650/t and rising local demand. The start of new facilities has further boosted copper consumption, which is likely to reflect in strong prices.
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