In April 2026, the secondary copper rod operating rate was 12.79%, higher than the expected 11.93%, down 1.46 percentage points MoM and 21.1 percentage points YoY. Looking back at the entire month of April, the secondary copper rod market, under the prevailing theme of copper prices fluctuating upward, was mired in structural contradictions triggered by industrial policies, presenting an overall complex picture characterized by "constrained supply, cautious demand, price spread-driven activity, and fluctuating transactions." The core logic of market operations was not simply about copper price changes, but rather the compliant invoice shortage caused by the "reverse invoicing" policy. This fundamental constraint ran through the entire month, profoundly affecting every link of the industry chain. The supply side continued to face a predicament of "cooking without rice." Although copper prices breaking through the 100,000 yuan mark mid-month briefly stimulated suppliers' shipment sentiment, the structural tightness in raw materials was not fundamentally alleviated. High-grade tax-inclusive copper scrap remained scarce, while tax-exclusive sources saw restricted circulation as downstream enterprises were unable to claim deductions. The invoice-matching difficulties caused by the policy meant that some suppliers, even with inventory on hand, found it hard to convert into effective supply. Meanwhile, the extended payment cycles resulting from "reverse invoicing" further intensified capital pressure in the trading segment, forcing some suppliers to sell at reduced prices at month-end to recover funds. This pressure was directly transmitted to the production side, causing secondary copper rod enterprise operating rates to linger at low levels throughout the month, with the highest monthly operating rate only rebounding to 9.37%, a significant YoY decline, and capacity release severely constrained.
The demand side exhibited extremely high price sensitivity and strategic wait-and-see behavior. Procurement by downstream wire and cable enterprises and traders was almost entirely driven by the price spread between primary and secondary copper rod, displaying pulsed characteristics. When the price spread widened to 1,500–1,600 yuan/mt, cargo pick-up speed noticeably accelerated; once the spread narrowed to below 800 yuan/mt, procurement quickly stalled. This "price spread-driven" consumption pattern highlighted the lack of endogenous growth momentum in secondary copper rod demand, with its economic substitution advantage being highly unstable. At the same time, persistently elevated absolute copper prices also suppressed end-user overall consumption capacity and willingness. Transaction activity throughout the month fluctuated with price spread movements, failing to sustain volume expansion. Enterprise profitability remained in loss territory for most of April, only briefly turning profitable at month-end as raw material price adjustments lagged behind finished product prices. However, this was more a result of price spread fluctuations rather than a fundamental improvement in the operating environment. Entering May, the initial post-holiday market performance suggests that the stalemate is likely to continue. After the Labour Day holiday, although copper prices surged again, purchase willingness among downstream secondary copper rod enterprises was not ignited, with the market presenting a wait-and-see pattern characterized by "supply release and demand hesitation." Suppliers' shipment sentiment rebounded along with prices, but downstream players generally considered prices too high and the market direction unclear, resulting in mediocre purchase willingness. More notably, the market pricing system became chaotic, with the deduction range for tax-inclusive bare bright copper fluctuating within a wide band of 800-1,200 yuan/mt, reflecting divergent market sentiment and a dysfunctional price discovery mechanism amid a lack of solid transactions.
Looking ahead to May, whether the market can break free from its predicament depends on the evolution of several key variables. The primary factor remains the implementation details and optimization progress of the "reverse invoicing" policy. If the invoice shortage issue is not alleviated, the structural contraction on the supply side and capital pressures will be difficult to improve, and the circulation of copper scrap in China will continue to be impeded. Second, a substantive recovery in end-user orders is the fundamental driver for breaking the current "high-price stalemate." If cable demand in real estate, infrastructure, and other sectors can grow steadily, it will provide solid support for secondary copper rod consumption. Finally, trends in copper prices and the price difference between primary metal and scrap will continue to dominate the short-term market pace. It is expected that in early May, the market will remain dominated by sideways movement and cautious positioning, with enterprises continuing to produce based on sales and focusing on risk control in their production strategies. If positive policy signals emerge or end-use demand recovers beyond expectations in mid-to-late May, market sentiment is expected to be boosted; otherwise, the pattern of weak supply and demand with sluggish transactions may persist throughout the entire month of May.
