Gradually Adapting to New Policies, Secondary Copper Rod Plants' Operating Rate Rebounds [SMM Analysis]

According to SMM data, the operating rate of secondary copper rod plants last week was 18.92% (surveyed enterprises: 15, annual capacity: 1.59 million mt), up 3.39 percentage points WoW. The average price spread between refined and scrap copper rods last week was 639 yuan/mt, up 386 yuan/mt from last week's 253 yuan/mt. The average discount for secondary copper rod prices in Jiangxi last week was 125 yuan/mt, down 325 yuan/mt WoW.

In the first half of the week, copper prices fluctuated at low levels. Although secondary copper rod plants initially resumed production, due to insufficient procurement of copper scrap, they could only maintain production for two days per batch. In the latter half of the week, copper prices were boosted by overseas macro factors, prompting copper scrap holders to sell at higher prices. Secondary copper rod plants reported that their raw material inventory could ensure continuous operation for 1-2 days. However, in some regions, production remained halted due to policy impacts. The impact of the Fair Competition Review Regulations on enterprises has gradually been adapted to, and secondary copper rod makers are increasingly adopting "reverse invoicing" as a procurement method. Comprehensive input and output invoices will help enterprises maintain stable operations.

Looking ahead to next week, more and more enterprises are adopting the "reverse invoicing" method. However, secondary copper rod makers have not yet reached a consensus on how to handle the increased procurement costs. As more secondary copper rod plants resume production, the operating rate is expected to continue to rise.