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[SMM Analysis: Price Spread Between Copper Cathode and Copper Scrap Widens by Over 2,000 Yuan, Driving Dominance of Hedging-Based Procurement] This week (July 13 – July 16), the copper scrap market operated under a triple framework of retreat after rapid rise in copper prices, ongoing compliance constraints from reverse invoicing, and intensifying high-temperature off-season. The most-traded SHFE copper contract surged to 105,020 yuan/mt mid-week, gaining nearly 2,000 yuan/mt for the full week compared to the start of the week. However, copper scrap was supported by compliance costs and suppliers holding prices firm, with full-week price fluctuations of less than 1,000 yuan/mt. The price spread between copper cathode and copper scrap widened from 2,445 yuan/mt at the start of the week to 3,923 yuan/mt, a WoW increase of over 2,200 yuan/mt, entirely driven by the unilateral rise in copper cathode prices. The resilience of copper scrap itself was the key supply-side feature this week, which directly gave rise to hedging-based procurement demand from secondary copper rod enterprises.....

This week (July 10 – July 16), SMM copper wire and cable enterprise operating rate was 68.96%, down 1.88 percentage points MoM and down 3.94 percentage points YoY. Industry production load continued to weaken. During the week, copper prices continued to rise, suppressing downstream willingness to sign new orders. Coupled with the traditional consumption off-season, overall end-use demand was weak, and overall order performance in the market was mediocre. Demand in sub-sectors generally lacked highlights, with only orders from State Grid released steadily. The rise in copper prices drove some rush-to-buy replenishment retail orders from end-users, providing bottom support for this week's operating rate.

SMM copper wire and cable enterprise inventory this week, affected by high copper prices and the price spread between futures contracts, wire and cable enterprises' willingness to stockpile raw materials remained sluggish, with raw material inventories falling 3.13% MoM. The rise in copper prices stimulated downstream end-users to rush to pick up goods amid the price rise, leading end-users to concentrate on consuming their existing finished product inventories, which fell 1.89% MoM.