Copper Shortage Is Irreparable Even after Biggest Mergers and Acquisitions, Here’s Why

【SMM Copper Scrap Flash】 The price difference between primary metal and scrap has historically been the "thermometer" for the secondary copper industry, and its widening typically effectively boosts copper scrap consumption. According to SMM, after end-June 2026, copper prices rose, and the price spread between primary metal and scrap expanded from less than 1,000 yuan/mt to around 4,400 yuan/mt, at a historically relatively high level. However, copper scrap consumption did not show a synchronized strong uptrend, and the indicator showed a "divergence," mainly disrupted by tax compliance factors: First, after the implementation of reverse invoicing, the circulation of uninvoiced copper scrap was hindered. The number of compliant individual accounts is limited, and the additional compliance cost is difficult to pass on downstream. Scrap utilization enterprises can only pass the pressure upstream by lowering the purchase price of copper scrap. Second, the supply of domestically produced, tax-inclusive copper scrap is scarce, and enterprises scramble for input VAT invoices. The invoice tax rate rose from 10.5% to 11.5%-12%, while the finished secondary copper rod sector faced fierce competition and could not raise prices, prompting enterprises to further depress raw material purchase prices. In summary, the rapid expansion of the price difference between primary metal and scrap in this round was not driven by demand; rather, it resulted from tax costs being passed upstream along the industry chain to the copper scrap side.

Hindustan Copper is conducting due diligence and is open to partners for the JV, such as Coal India and NTPC Mining.