European scrap market still tight as cash copper prices close in on $7,000

Copper scrap discounts are still under chronic strain in Europe despite a 5% recovery in prices on the London Metal Exchange in May, scrap traders and consumers told Metal Bulletin.

Some smaller scrap merchants were starting to offer No 2 scrap more freely in northern Europe last week after cash copper prices rose approached $7,000 per tonne, or about €5,100 per tonne, on the London Metal Exchange.
But discounts for No 2 scrap qualities like birch-cliff remain pegged at about €50-100 per tonne, trade sources said.
Discounts for No 1 scrap are even narrower and are typically less than €10. In some cases, millberry is trading flat or at small premiums to the LME price, sources said.
“We haven’t been very active in the market because prices for scrap have been so high that we’ve bought just the absolute minimum,” a source at a copper refinery told Metal Bulletin.
Facing the sellers’ market for copper scrap, refiners are also looking to cut down on consumption by reusing rejected anodes wherever possible, the refiner said.

“The...

Published

Mark Burton

May 27, 2014

15:05 GMT

London