Entering late August, market attention gradually shifts to the resumption status of secondary copper rod makers in various regions. Although some companies had previously expressed their intention to resume production and made corresponding preparations, the lack of clear policy guidance from the government due to new regulations has led many small enterprises to adopt a cautious stance, opting to halt production and wait.
According to the latest SMM survey, China's total capacity for secondary copper rods has reached 8.16 million mt, with Anhui accounting for 14% and Sichuan for 4%. The survey covered 12 secondary copper rod makers in Anhui and 3 in Sichuan, with a total capacity of 1.5 million mt. Currently, nearly half of these companies are operating normally, but most are adopting a "wait and see" approach.
The survey results indicate that entering August, most secondary copper rod makers in Sichuan and Anhui have not resumed production as quickly as the market expected. This is mainly due to the lack of clear implementation details of the new regulations, leading to uncertainty in predicting future policy directions and making it difficult for companies to formulate long-term production plans. As of today, as summer is about to end, secondary copper rod makers in Sichuan and Anhui remain shrouded in policy uncertainty. Although some companies had previously indicated that they were ready to resume production and expected clearer production plans after August 15, overall, small enterprises are still hesitant to act rashly. They fear that blindly resuming production amid unclear policies could bring greater operational risks. Therefore, these companies generally adopt a conservative strategy, hovering between halting and resuming production, waiting for more explicit policy guidance from the government. The entire industry is showing a cautious and slow recovery trend.
Meanwhile, it has been noted that under the backdrop of policy adjustments, some secondary copper rod makers in Sichuan are considering industry consolidation. Some small enterprises may choose to exit the market due to the inability to withstand policy pressure and market competition, while large enterprises are expanding their market share and enhancing competitiveness through mergers and acquisitions. Additionally, some companies in various regions will transition from secondary copper rod production to copper anode production to cope with the challenges brought by policy adjustments.
In summary, the implementation of the new regulations has a profound impact on the secondary copper rod industry. It not only affects production costs and tax burdens but also directly influences the supply and demand relationship of copper scrap and the output of T3 copper rods. Therefore, companies are highly attentive to the new regulations, hoping that the government will provide clear policy signals as soon as possible so that they can promptly adjust their production strategies and resume normal production activities. Looking ahead to next week, as policies gradually become clearer, secondary copper rod makers in Sichuan and Anhui are expected to gradually resume production. However, this process may take some time, and companies need to make decisions based on policy changes and actual market conditions. SMM will continue to update on the subsequent implementation of the new regulations.
