For the Quarter Ending June 2023
In the second quarter of 2023, the price of copper plate in the US remained stagnant due to various macroeconomic factors influencing its stability. Initially, there was a price increase as the Producer Price Index unexpectedly declined, relieving some downward pressure on copper plate manufacturing. The supply-demand ratio remained stable, indicating that the US government was nearing the end of an interest rate hike and planning to decrease it in the coming weeks. However, during the latter half of the quarter, the market conditions drastically declined. Several major banks in the US faced financial difficulties, leading to a debt crisis in the spot market. As a result, buyers adopted a wait-and-watch approach, and purchasing rates were based on immediate demand. The consumption rate in the German spot market remained stable due to ongoing infrastructural development and the decarburization effect for electrification in various mills.
The Asian market experienced an upward trend in copper plate prices during the second quarter, driven by an optimistic market sentiment in China. Copper smelting mills in China operated at a steady pace, supported by stable domestic consumption. Supply disruptions in certain domestic warehouses allowed mills to stabilize and operate at full capacity. Government policies and deals increased production costs in the Chinese spot market, providing strong support for copper plate production. Although the demand surged, manufacturing activity did not increase as much, resulting in lower inventory levels. The supply of copper scrap remained stable, contributing to the upward momentum in copper prices. However, increased import rates and the Chinese government's import subsidy policies attracted more cargo shipments, causing a slight decline in prices. Additionally, the ban on importing Chinese commodities, including copper plate, by overseas countries such as the US and Eurozone, led to higher local inventory levels in China. To bridge the supply-demand gap, local mills sold copper plate in surplus quantities at lower prices. Despite the bearish market sentiment, buyers only made on-demand purchases in the Chinese spot market.
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In the German spot market, copper plate prices remained stable during the second quarter, primarily due to macroeconomic factors. The weakening of the US dollar provided a strong foundation, and it was speculated to be the final phase of interest rate reduction in Germany. Copper smelting mills operated consistently, ensuring a stable supply of copper plate. Buyer demand remained steady, with purchases made on-demand as they adopted a wait-and-watch approach. The decarburization and electrification efforts in various copper smelting mills contributed to a high consumption rate and price stability for copper plate. However, the economic condition worsened in the latter half of Q2, leading to a recession in the German economy and a consistent increase in inflation rates. Trade conditions also deteriorated, both domestically and overseas. The purchasing power of consumers decreased, resulting in a surge in local inventory levels for copper plates. Consequently, the German government imposed countervailing duties on the import of cheaper copper products from Chinese and Asian markets. The downstream automotive industry experienced a decline in sales of electric vehicles, resulting in an oversupply of copper plate. To boost consumption rates and improve the country's economic condition, the German government is planning to enter into various deals.
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