Ship to Shore
The closing of the Chemetco refinery in Illinois this fall has eliminated the last sizable U.S. destination for some grades of copper-bearing scrap. The bad news for dealers who like to keep their copper scrap in North America continues to hit, as Noranda has announced that it will close its Gaspe, Quebec, smelter for six months in 2002 due to slack demand.
A scrap dealer in Nebraska—about as far from a deep-water port as is possible in the U.S.—notes that the majority of his copper is heading offshore now. "Our aluminum has mostly stayed domestic, but all the coppers from number two grades down has mostly gone overseas," he notes.
Exporting is not new for this dealer, but the trend has been overwhelming even in the Cornhusker State. "We’ve been exporting for seven or eight years now, but it has moved toward overseas a lot in the last 12 to 24 months."
China’s hunger for copper scrap continues unabated. Even domestic wire choppers are having difficulty procuring material while competing against export brokers shipping primarily to China, with South Korea and India also growing as destinations for copper-bearing scrap.
Dealers are hoping that a price bump could help bring out some more material, no matter where it is shipped. Early December has seen Comex copper make a move upward by several cents per pound, with dealers hopeful the extra few cents will stick.
It is unclear what effect, if any, Enron’s troubles will have on the nonferrous markets. The company may be sitting on some copper inventory it needs to liquidate, but announced primary production cutbacks might more than offset the release of this material.