This week, the secondary copper rod market operated against the backdrop of copper prices fluctuating at highs above the 100,000 yuan mark, with all segments of the industry chain struggling to find balance amid policy constraints and price negotiations. The market overall exhibited complex characteristics of "marginal recovery on the production side, price pressure on the raw material side, and cautious market trading." On the production side, the operating rate of secondary copper rod rebounded 4.31 percentage points WoW to 9.25%, the average price difference between copper cathode rod and secondary copper rod remained at a relatively high level of 1,605 yuan/mt, and the weekly average gross sales profit calculated by the SMM model turned from loss to profit, reaching 78 yuan/mt. This was partly attributable to the relative advantage maintained by the price spread between copper cathode rod and secondary copper rod amid copper prices fluctuating at highs, which provided an economic incentive for secondary copper rod consumption; it also reflected that some enterprises captured brief profit windows amid price fluctuations. However, this marginal improvement in production activity failed to reverse the market's structural predicament.
The core contradiction on the supply side remained the compliance challenges and inventory pressure triggered by the "reverse invoicing" policy. For the copper scrap segment, a notable anomaly was that despite copper prices fluctuating upward during the week, domestic copper scrap prices fell instead of rising. The fundamental reason was that the policy's strict invoicing requirements severely constrained the purchasing capacity of downstream scrap utilization enterprises, meaning that even though rising copper prices stimulated some supply to flow into the trading segment, it could not be effectively absorbed. Trader inventory therefore accumulated, capital pressure increased, and they were forced to cut prices to recover funds. Meanwhile, imported copper scrap, which comes with 13% VAT special invoices and perfectly meets compliance requirements, became an object that downstream enterprises rushed to buy, forming a stark contrast and price divergence with domestic raw materials lacking invoices. This value gap between "tax-inclusive" and "tax-exclusive" sources profoundly distorted the market's circulation structure and pricing system.
The demand side exhibited a high degree of price sensitivity and strategic wait-and-see behavior. Downstream secondary copper rod and scrap copper anode plate enterprises were extremely rational in their purchasing behavior, generally inclined to seek low-priced sources. When copper prices pulled back notably, some enterprises would buy the dip to lock in costs; once prices shifted to fluctuations or an unclear direction, most enterprises turned to cautious observation, awaiting clearer signals. This caused weekly market transactions to fluctuate with prices, shifting from "tight supply-demand balance" to "mediocre transactions" to "moderate transactions," with demand release exhibiting obvious pulse-like characteristics, lacking stability and continuity. Although the price difference between copper cathode rod and secondary copper rod remained at a relatively favorable level, the elevated absolute copper prices themselves suppressed order release from end-user industries such as cables, causing downstream procurement to be dominated by rigid demand and opportunistic restocking, making it difficult to generate large-scale, sustained purchasing enthusiasm. Overall, the secondary copper rod market is currently caught in a dual struggle between "policy-driven" and "high-price" dynamics. On one hand, the invoice shortages and compliance costs caused by the "reverse invoicing" policy have severely hindered the normal circulation of copper scrap in China, resulting in structural barriers to shipments despite willingness to sell, and abnormal price declines deviating from the broader market. On the other hand, persistently high copper prices have kept the demand side cautious, with purchasing behavior becoming short-term and speculative. For the market to break out of the current predicament of weak supply and demand and stagnant trading, it requires not only clearer and more stable macro copper price direction to calm market fluctuations and stabilize enterprise expectations, but more fundamentally, further optimization and clarification of industrial fiscal and tax policies to unblock compliant circulation channels for copper scrap in China, reduce transaction costs, and thereby rebuild a healthy supply-demand cycle and price discovery mechanism. In the short term, the market is expected to maintain a cautiously volatile pattern amid policy constraints and price negotiations.
