In Q1 2023, Copper Plate prices in the US market rose due to an increase in downstream construction and machinery inquiries amidst the banking sector's turmoil. Buyers opted for long-term contracts to meet their needs, avoiding the relatively quiet spot market. However, market participants cautioned about potential supply disruptions due to protests in Peru and a planned outage at the Kennecott smelter in Utah, USA. The delayed shipments from Peru and Chile led to an increased interest in acquiring copper scrap, but the existing supply and demand balance kept US premiums stable. The failure of Silicon Valley Bank had a modest impact on copper prices, and the US Federal Reserve's interest rate hike in March had little influence. Market sentiment returned to neutral after the panic subsided. Due to the liquidity strain on several US banks, the US Fed appears unlikely to tighten monetary policy much in the medium and long term. Consequently, the Copper Plate (C 11000) prices for Ex Alabama and FOB Alabama Port were fixed at USD 16884/MT and USD 16957/MT.
During Q1 2023, Copper Plate prices in the Chinese market witnessed an uptrend due to the surge in Copper futures and a balanced market with limited global copper stocks. According to market players, Copper began the New Year on a positive note, with funds returning to the market in anticipation of China's rapid exit from a year of lockdowns. However, many small and medium-sized cable enterprises downstream closed for the Spring Festival holiday in January due to the epidemic situation and off-season consumption. With no apparent improvement in consumption, downstream replenishment remained weak, and spot market transactions were scarce. As Q1 progressed, terminals, processing plants, and downstream businesses resumed production, and orders for Copper plates increased. As the country entered a seasonal peak consumption season, demand rose, and sellers prioritized the delivery of long-term orders. In the face of high Copper prices, downstream companies adopted a wait-and-see approach. Copper prices increased as market expectations for domestic consumption recovery improved, but the rise in the US index limited Copper price gains to some extent. As a ripple effect, the Copper Plate (C 12000) prices for Ex Qingdao settled at USD 8280/MT.
The European market witnessed a rise in Copper Plate prices during Q1 2023, attributed to high demand for refined Copper, low inventory levels on all three exchanges, and a rise in raw material prices during the banking turmoil. However, some buyers are avoiding Russian Copper due to heavy stocking in futures warehouses. Europe's tight supply, uncertainty in demand, and record-high annual contract prices are likely to affect the spot market. Copper Rod Prices, which are an economic indicator, were affected by the recent rout in global markets due to the collapse of Silicon Valley Bank and Credit Suisse. Producers warn that price volatility due to diminished inventories poses challenges for traders, producers, and consumers. The recent surge in orders was due to the significant drop in copper prices rather than an increase in actual demand from end-users. Buyers reported a continued downward trend in inventories compared to 2022. Thus, the Copper Plate (CW008A-1 mm) prices for Ex Drolshagen and FOB Hamburg are fixed at USD 14100/MT and USD 14281/MT.
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