If the subsidy is issued as scheduled this week, secondary copper rod plants may resume production [SMM Analysis]

According to the SMM survey, the operating rate of secondary copper rod plants last week was 15.53% (surveyed enterprises: 15, capacity: 1.59 million mt/year), down 2.91 percentage points WoW. The average price spread between copper cathode rods and copper scrap rods last week was 253 yuan/mt, down 346 yuan/mt from 599 yuan/mt last week. The average premium for secondary copper rods in Jiangxi was 200 yuan/mt, up 373 yuan/mt WoW.

Last week, only a few secondary copper rod plants maintained production. However, due to the inability to secure enough copper scrap to guarantee a full day's production, these plants could only produce one batch every two or even three days. The survey revealed that some enterprises began quoting prices for copper scrap last week, but the purchase volumes were very unsatisfactory. Additionally, the supply of copper scrap with 13% VAT invoices in the domestic market was very limited, forcing companies to opt for non-invoiced copper scrap as a supplementary purchase. Furthermore, some secondary copper rod plants would start warming up their furnaces last week. If the local government issues the July subsidy as scheduled on August 15, these plants will resume normal production. Enterprises are also observing which region will receive the subsidy and resume production the fastest. Looking ahead to this week, if the number of resuming enterprises increases significantly, the operating rate of secondary copper rod makers will rise. However, due to the limited supply of copper scrap, it will be difficult for these plants to ensure continuous production, and the increase in the operating rate will be limited.