Copper Market Stalemate: Prices Near 100,000 Yuan/mt, Supply Tight, Demand Weak

This week (6/22–6/25), the secondary copper rod and copper scrap markets were locked in a deep stalemate, marked by the supply side holding prices firm and holding back from selling, the demand side waiting for further price declines and refraining from purchasing, and persistently sluggish transactions, as copper prices continued to fall and approached the psychological threshold of 100,000 yuan/mt. The entire industry chain was caught in a narrow tug-of-war driven by three forces: constraints from compliance invoices, resilient raw material prices, and end-user wait-and-see sentiment. In terms of price trends, the SHFE copper closing price at 11:30 dropped from 104,610 yuan/mt on Monday to 103,180 yuan/mt on Thursday, briefly approaching the 100,000 yuan/mt mark intraday before rebounding slightly, with the weekly decline reaching 2,570 yuan/mt. However, copper scrap prices lagged significantly in adjustment—bare bright copper in Guangdong, excluding tax, fell only 1,700 yuan/mt for the week to 89,900-90,000 yuan/mt, a much smaller decline than that of copper cathode. The resilience of raw material prices stemmed from the residual effects of supply tightness following compliance inspections on “reverse invoicing” in south China, as well as suppliers’ psychological line of “unwilling to sell cheap before prices break below 100,000 yuan/mt.” Supply-side sentiment cooled gradually as copper prices fell, with the sentiment index for copper scrap sales sliding from 2.49 to 2.30. Suppliers generally chose to hold prices firm before copper prices broke below 100,000 yuan/mt; even when prices accelerated their decline on Thursday and Friday, there was no panic selling—on the contrary, they held back even more from selling. Behind this behavior of “not selling on price dips” was the already tight supply of compliant and invoice-able material, meaning suppliers feared selling at a loss rather than failing to sell. The demand side presented a completely different picture: the price difference between primary metal and scrap narrowed from 2,431 yuan/mt on Monday to 872 yuan/mt on Thursday, and the price spread between primary and secondary copper rod collapsed from 870 yuan/mt to an extreme low of 340 yuan/mt. Secondary copper rod prices had already been at a premium to futures for two consecutive days, virtually erasing the economic advantage of secondary copper rod. According to SMM data, the operating rate of secondary copper rod producers this week was 20.23%, down 0.32 percentage points WoW and 7.08 percentage points YoY. The average price spread between primary and secondary copper rod was 563 yuan/mt, narrowing by 557 yuan/mt WoW. The average discount of secondary copper rod in Jiangxi against copper futures was 13 yuan/mt, narrowing by 582 yuan/mt WoW. The average gross profit for the week was 1,205 yuan/mt, down 307 yuan/mt. Secondary copper rod enterprises still had the willingness to replenish raw materials at low prices early in the week, but suppliers were uncooperative. After mid-week, as copper prices dropped to around 103,000 yuan/mt, downstream end-users generally believed that "there is still downside room, and there is no rush to purchase until prices fall below 100,000 yuan/mt," causing purchase willingness to continue weakening. By Thursday, copper prices approached the 100,000 yuan/mt mark, and terminal wire and cable enterprises almost stopped purchasing; the market only saw sporadic transactions supported by rigid raw material replenishment demand from secondary copper rod enterprises. By region, in south China, affected by earlier "reverse invoicing" quota restrictions and compliance inspections in areas such as Jiangxi, Hubei, and Shuyang in Jiangsu, the supply of invoiceable tax-inclusive goods remained tight, and the premium of secondary copper rod against futures precisely reflected this structural shortage. In the north, although supply was relatively ample, end-users did not purchase, resulting in many quotes but few transactions. The trading sector continued the previous week's strategy of "fast in, fast out to maintain turnover," without daring to stockpile on expectations of price increases. Over the whole week, the market's core contradiction still revolved around the chain of "copper prices falling but compliant raw material prices resisting decline → high costs of secondary copper rod leading to a premium against futures → end-users waiting on the sidelines for even lower copper prices." Compounded by still relatively tight supply in some regions under invoice constraints, weekly transactions had few bright spots apart from rigid raw material replenishment by secondary copper rod enterprises. Whether the market can break the deadlock going forward depends, on the one hand, on whether copper prices can stabilize near the 100,000 yuan/mt level to provide a clear direction, and on the other hand, still depends on the progress of "reverse invoicing" compliance inspections in south China and the recovery of input invoice supply. Otherwise, the end-users' mentality of "waiting longer when prices fall deeper" will continue to suppress any volume increase in transactions.