Europe’s biggest copper smelter, expects scrap supply to match demand until at least March after a weakening in Chinese consumption.
About 40 percent of copper metal comes from recycled materials because it’s cheaper to re-use metal than dig ore out of mines. China, the biggest copper user, began to use less scrap from June, Vice President Hans-Gerhard Hoffmann said in an interview in London yesterday.
“This balanced situation with full feed supply should last until February-March,” he said. “At some point we must expect that the Chinese will get back into the market again.”
Global scrap supply faltered this year as the world economy contended with its worst slump since the 1930s, curbing industrial production. China imported record amounts of copper during the first half of the year.
The shortage boosted scrap prices to as little as 120 euros ($177.50) to 150 euros a ton below the benchmark London Metal Exchange contract for refined copper in the first quarter, Hoffmann said. Better supply and weaker Chinese demand has driven the discount back down to about 300 euros now, he said. He was referring to No. 2 scrap, which contains 92 percent to 96 percent copper.
“As long as we see a balanced market I see no reason why it should narrow,” he said.
Aurubis, which has run its plants at full capacity again since June, treats 500,000 tons of recycled materials a year, with more than half of it No. 2 scrap.
Capacity will expand by as much as 120,000 tons in the first half of 2011 after the Hamburg-based company spent 62.5 million euros on a program that will allow it to handle more complex materials such as autocatalysts and electronic scrap.
