Page 61 from: March 2016

61March 2016

care and maintenance or the start-up of
new projects. The dampening effects on
supply will bring about a recovery in
copper prices ‘towards the end of the
decade’, the CRU’s analysts conclude.
As regards the here and now, the Euro-
pean copper market has been very flat
over recent weeks. Supply in the pri-
mary sector has been good but scrap
shortages have been apparent in some
instances. Premiums for copper cath-
odes have hovered between US$ 50
and US$ 60 per tonne and market
experts expect this level to persist in
the weeks to come. Traders stress that
demand in Western Europe has been
relatively strong in the first two months
of the year but the signing of long-term
contracts remains an exception rather
than the rule.
Copper prices have been moving within
a narrow bandwidth for a number of
weeks, with scrap values coming close
to LME levels. In Germany, bright wire
scrap (Kabul) has been commanding
some US$ 4487 per tonne, copper
granules 1A (Kasus) around US$ 4543
and non-alloyed bright wire scrap in the
region of US$ 4370.
Based in Germany, leading integrated
copper group and copper recycler Auru-
bis saw operating earnings before taxes
drop from Euro 39 million in the first
quarter of the 2014/15 financial year
to a ‘below expectations’ Euro 36

million in the corresponding period
of 2015/16. In what were generally
favourable market conditions, results
were ‘burdened’ above all else by ‘the
weak scrap markets and a lower metal
gain in conjunction with reduced metal
prices’, according to executive board
spokesman Erwin Faust. However, the
group expects copper scrap markets to
recover ‘from quarter three onwards’
or, in other words, around the middle
of 2016.
Copper scrap availability remains tight
in the USA, partly because of difficult
weather conditions in many parts of
the country. It has been reported that
consumers have been raising their
bids of late in an attempt to obtain
material.
Economic growth may be decelerating
in China but the country continues to
post records. Last year, Chinese imports
of refined copper reached an all-time
high of 3.68 million tonnes, beating the
2014 tally by 2.5% following strong
purchasing activity towards the end of
last year. Customs statistics also reveal
a 3.7% year-on-year increase in China’s
copper scrap imports last December to
a fraction over 380 000 tonnes.
This demand coincides with increasingly
tight supply in key exporting regions of
the world. In the USA, for example, the
low prices available to collectors and
difficult weather conditions in many

parts of the country are two of the
factors claimed to be responsible for
consumers struggling to obtain certain
grades, most notably No 2 copper.

Latest figures from the International
Copper Study Group (ICSG) cover the
first 11 months of last year and show a
global refined metal surplus of 51 000
tonnes for the period compared to a
deficit of 544 000 tonnes in January-
November 2014. However, shortfalls
have been recorded in each of the
last three months scrutinised by ICSG
analysts, including a deficit of 27 000
tonnes in November 2015 itself.

World refined copper usage fell 1%
in the first 11 months of last year to
20.762 million tonnes despite 1.5%
increases in Africa and Asia; these gains

were more than offset by declines of
1.5% in the Americas, 10% in Europe
and 55% in Oceania. Refined copper
output climbed 1.6% in last year’s
opening 11 months thanks to a gain
of 2% in primary production to 17.244
million tonnes; secondary production
from scrap actually fell by 3000 tonnes
from 3.572 million tonnes in January-
November 2014 to 3.569 million
tonnes in the corresponding period of

Non-Ferrous