Secondary copper sector stays steady

Output of secondary refined copper, as categorized by the International Copper Study Group (ICSG), has remained stable globally in the first 10 months of 2022 compared with last year.

According to the Lisbon-based ICSG, 3.45 million metric tons of secondary copper were produced globally in the first 10 months of this year. That marks a 0.34 percent increase compared with the roughly 3.44 million metric tons made in January through October 2021.

In the United States, several secondary copper production installations are underway, but in the first two-thirds of 2022, secondary copper production dropped by 18,600 metric tons compared with the first eight months of 2021.

U.S. Census Bureau figures published by the U.S. Geological Survey (USGS) show output at brass mill melt shops has dropped by 10,000 metric tons so far in 2022, and the output of ingot makers has dropped by 4,200 metric tons.

In the red metal refineries category, USGS says domestic output has dropped by 5,700 metric tons. In the closest thing to good news for U.S. scrap recyclers, red metal foundries increased output by 1,300 metric tons in the first eight months of this year compared with last year.

In the meantime, the majority of red metal scrap continues to leave the U.S. In the first eight months of this year, the USGS says 634,200 metric tons of copper-bearing scrap was exported, an increase of 5.6 percent from the 600,300 metric tons exported in the first eight months of 2021.

China has been far and away the largest recipient of outbound U.S. red metal scrap so far in 2022, having received more than 198,000 metric tons of the material. That figure represents 31 percent of 2022 U.S. copper and brass scrap exports. Other nations receiving steady amounts of America’s outbound red metal scrap this year have been Malaysia, India and South Korea.

Primary copper output also has risen in 2022 (by about 517,000 metric tons), ICSG says, but consumption has outpaced production. “Over the first 10 months of 2022, the world refined copper balance, based on Chinese apparent usage (excluding changes in bonded/unreported stocks), indicated a preliminary deficit of about 307,000 metric tons,” ICSG writes in its monthly summary.

Copper inventories at the world’s three largest exchanges and warehouses have diverged, according to ICSG. Inventory levels are up just 0.8 percent at the London Metal Exchange (LME) at the end of this November 2022 compared with the end of 2021. Copper inventory has fallen by 47 percent at COMEX warehouses in the same time frame. However, copper inventories at Shanghai Futures Exchange (SHFE) warehouses have risen by 84 percent during 2022.

“As of the end of November 2022, copper [inventories] held at the major metal exchanges (LME, COMEX, SHFE) totaled 191,951 metric tons, an increase of 1,021 metric tons (0.5 percent) from [inventories] held at the end of December 2021,” ICSG writes.

The average LME cash price for copper in November 2022 was $8,029.25 per metric ton, which ICSG says is 5.4 percent higher compared with the October 2022 average price. The average 2022 price of $8,834.22 per metric ton is 5.4 percent lower, however, compared with the 2021 annual average copper price.