SMM, May 15:
According to SMM data, the operating rate of secondary copper rod was 6.84% this week, up 0.08 percentage points WoW and down 15.03 percentage points YoY. Meanwhile, the average price difference between copper cathode rod and secondary copper rod was 1,914 yuan/mt, widening by 549 yuan/mt WoW. In addition, the average discount of secondary copper rod in Jiangxi against copper futures was 1,518 yuan/mt, widening by 773 yuan/mt WoW. According to SMM's secondary copper rod gross profit model, the average gross profit during the week was 857 yuan/mt, an increase of 477 yuan/mt.
This week, after copper prices experienced wild swings, the secondary copper rod market presented a complex situation with intensified tug-of-war between sellers and buyers and rapidly shifting market sentiment. However, the release of supply did not smoothly translate into effective circulation, but instead encountered multiple bottlenecks. On one hand, the overall capacity operating rate of secondary copper rod enterprises nationwide remained limited, with insufficient actual capacity to digest raw materials; on the other hand, concentrated shipments to limited regions extended unloading cycles, and large volumes of copper scrap were stockpiled in warehouses of traders and downstream enterprises, significantly raising social inventory levels. Furthermore, a notable regional fragmentation emerged in the market: due to differences in the implementation of the "reverse invoicing" policy leading to varying capital turnover efficiency, northern enterprises had faster payment cycles than those in south China. Southern yards pushed for lower prices to transfer cost pressure upstream, causing bare bright copper purchase prices in south China to be generally 400-600 yuan/mt lower than in the north, creating an abnormal regional price spread.
Demand side, performance diverged sharply from the sharp rise in copper prices. Although the price difference between copper cathode rod and secondary copper rod continued to widen, expanding from 1,780 yuan/mt at the beginning of the week to 2,550 yuan/mt mid-week, providing significant economic incentive for secondary copper rod consumption, downstream purchase sentiment did not warm up accordingly but instead declined continuously from 2.23 to 2.04. Elevated absolute copper prices severely suppressed the acceptance capacity of end-use industries, destocking speed of downstream finished products slowed down, causing secondary copper rod enterprises to be extremely cautious in raw material procurement and begin attempting to push for lower prices. On the demand side, secondary copper rod enterprises took advantage of price pullbacks to make small purchases, slightly improving market trading conditions compared to previous days, with both procurement and sales sentiment indices rebounding. Looking at the full week, the secondary copper rod market operated within the core contradiction of "high prices stimulating supply release" versus "weak demand constraining procurement volume." Wild swings in copper prices amplified the tug-of-war between sellers and buyers, and high inventory pressure combined with regional structural issues remained urgent challenges for the market to resolve.
As the world's largest copper consumer, China's industry chain faced three major challenges: rising dependence on overseas upstream resources, overcapacity in midstream processing, and downstream demand suppressed by high copper prices. To help the industry navigate changes, SMM joined hands with copper industry chain enterprises to jointly compile the bilingual (Chinese and English) edition of the *2026 China Copper Industry Chain Distribution Map*. Click the link below to receive the copper industry chain distribution map for free:. SMM joint production contact: Liu Mingkang 156 5309 0867
