Cunext to build 100,000 t/y secondary smelter in Spain

Written by Jamie McMullan

Market contacts have noted a reduction in the availability of refinery-grade (#2) scrap in January. This follows a slight improvement in December, as export markets were less attractive to European scrap dealers due to the freight disruption that has resulted from the conflict in the Red Sea. While the improvement to the copper price in the middle of January did spur an increase in availability, it was short-lived, and volumes increased less than would be typical. One possible reason for the decrease in availability m/m is smelters returning to the market following a slower period over Christmas and New Year.

China has bought scrap at competitive discounts in the Spanish market, but generally exports to Asia remain less attractive for European scrap deals as Suez Canal-related freight disruptions have continued. Availability for #1 grade and bare bright remains relatively better due to continued weak demand for direct melt. We assess discounts for #2 grades at €360/t and €240/t for #1 grades.

In other news, the Spain wire rod producer Cunext has announced plans to build a secondary smelter next to its existing copper rod line, see smelter news for more details.

Domestic fundamentals unchanged in the US scrap market

While there has been little change to domestic fundamentals in the U.S. scrap market m/m, discounts have tightened slightly. Last month, we understood that China was consuming fair volumes of U.S. refinery-grade material at competitive discounts (low 20s ¢/lb) in the run-up to the CNY, when Chinese consumers typically build inventory. The increased competition has led domestic #2 consumers to tighten their buying spreads, with quotes received this month edging closer to 30 ¢/lb. Market participants have noted that a new U.S. secondary smelter has sent tenders to the market for refinery-grade material for the first time. We assess U.S. discounts for bare bright, #1, and #2 grades at 7-9 ¢/lb, 12-13 ¢/lb, and 31 ¢/lb, respectively.  

Latest in Market