Santiago: A severe contraction in the global scrap metal market has supported copper prices as so-called urban miners gather less second-hand metal for refining amid the global financial crisis.
Scrap copper accounts for nearly a third of the 24-million-tonne world copper market, but analysts could only provide rough estimates of how much less scrap was available.
"It's very hard to put any kind of number on the scrap side of things," said Gayle Berry at Barclays Capital. "It's difficult to monitor ... but it's an extremely important source of supply."
Copper scrap is like a buffer: When prices reached $9,000 (Dh33,059) a tonne in July 2008, scrap supply helped keep them from rising further, and the collapse in scrap supplies helped support prices when they fell to around $3,000 a tonne in December.
"It looks like scrap and Chinese buying in this year's CRU are turning out to be the real dark horses that will define world copper prices going forward," Bart Melek, vice president of BMO Capital Markets, said during a reception for the world's largest copper industry event in Santiago last week.