Why has the influence of non-registered copper cathode in the market been increasing in 2024? [SMM Analysis]

In 2024, China's copper cathode imports are expected to reach 3.5 million mt, a decrease of only 10,000 mt YoY from 2023. However, the proportion of imports from countries producing non-registered copper cathode has been gradually increasing. According to SMM, the proportion of China's imports from major non-registered copper cathode producing countries was about 47% in 2022, increased to around 50% in 2023, and reached 62.17% from January to August 2024.

As the proportion of non-registered sources flowing into China increases, the Chinese copper cathode market have also gradually favored these sources. The prices of these sources are generally 100-300 yuan/mt lower than mainstream standard-quality copper.

Since 2024, SMM has been recording the prices of major circulating and high-quality non-registered brands in the market, observing the price spread between non-registered sources and SMM standard-quality copper and hydro copper. From February to June, the price spread between non-registered prices and SMM standard-quality copper and hydro copper remained around 200 and 100 yuan/mt, respectively. However, in July and August, the quantity of imported copper cathode in China decreased, and the quantity of non-registered sources also decreased, causing the market price spread to narrow significantly. Especially in late August and early September, non-registered sources became scarce, and the price spread with SMM standard-quality copper and hydro copper once narrowed to within 100 and 50 yuan/mt.

After entering October, with the concentrated arrival of non-registered sources and sluggish market trading, the price spread between non-registered sources and SMM standard-quality copper and hydro copper widened again, dragging down the trading volume and prices of standard-quality copper.

In 2024, with the increase in the proportion of non-registered imports and the shift in downstream purchasing preferences, the mainstream copper trading prices in the market will also be dragged down. It is expected that this proportion may further increase to over 65% in 2025.