Photo by Brian Taylor.
In its March 6 letter to customers, Germany-based recycled-content copper producer Aurubis writes that by February, “The impacts of coronavirus, or COVID-19, had a firm grip on the copper market.”
“The effects of COVID-19 are causing concern among economists,” the firm continues. In addition to its European capacity, the company has a facility with a scrap melt shop in Buffalo, New York. Aurubis adds, “The German newspaper Handelsblatt reported that the Organization for Economic Cooperation and Development (OECD) can no longer rule out the possibility that the global economy could even shrink if the situation doesn’t improve soon.”
Specifically to the copper sector, Aurubis notes, “COVID-19 continued to influence copper production in February, especially in China.” Citing S&P Global Platts, the red metals firm says portions of the copper processing industry in China are currently producing at 60 to 90 percent of their normal level.
On the pricing side, “News about the impacts of the coronavirus continued to strain the price trend,” Aurubis writes. On terminal markets, copper closed February at about $5,573 per metric ton, or $2.53 per pound, according to the firm.
Concerning red metal supply, some primary smelters were facing pressures because of the global slowness caused by COVID-19-affected regions. One smelter “was faced with the challenge of finding customers for its sulfuric acid output,” writes Aurubis.
Nonetheless, finished copper inventories in global warehouses “made a significant leap in February,” says Aurubis, standing at 550,000 metric tons at the end of the month. That figure is about 184,000 metric tons higher—a 50 percent boost—compared with 29 days earlier.
Aurubis produces more than 1.1 million metric tons of copper annually, consuming as much as 600,000 metric tons per year of red metal scrap.