Copper markets search for a bottom.

The high-flying copper scrap market might be finding a short-term bottom. While likely to be a short-term situation, the search for a floor price follows some sharp declines toward the end of 2006.

These declines followed a tremendous run-up throughout most of 2006. But, with prices slipping to below $2.60 per pound by the middle of January, buyers appear to be reemerging on the market.

One industry report notes that China imported 111.16 metric tons of copper in December, the greatest amount the country imported in a single month during 2006.

While Chinese buyers are expected to reenter the market to purchase copper scrap, which could help boost prices this year, the markets will have to wait until the end of Chinese New Year, when buying from Chinese interests is expected to strengthen.

The expectation of an improved economic environment is also contributing to the view that copper markets will see a moderate strengthening this year.

While copper scrap may find new strength, China's position as the major buyer for material is expected to grow.

One copper exporter notes that China is looking to build more than 20 copper smelters throughout the next several months, which will likely provide fairly decent markets for copper scrap.

However, there also are signs that Chinese buyers may be looking to strengthen their internal use of copper scrap, while scaling back their purchases of copper from outside the country. With only minimal markets for the material in the United States, this could create some problems for North American suppliers throughout the next several years.

There is a trend for end users to buy on the spot market when working stock is depleted. Globally, many of the traders of secondary copper say that total shipments to China have declined, while in the United States, a slumping housing industry has added to the concern about secondary copper markets.

However, more bullish sentiments on a leveling off of the housing market could help to give copper a base. At the same time, orders from China are expected to drop off in light of Chinese New Year. However, once the holiday ends, orders from that country tend to pickup.

If there is a consensus, it is that prices for copper and aluminum should modulate a bit this year, though the market should continue to exhibit underlying strength, which should keep prices from declining too far from their present levels.

(Additional news about nonferrous scrap, including breaking news and consuming industry reports, is available online at www.Recycling Today.com.)