The Operating Rate of Secondary Copper Rod Plants Declined Significantly Due to Policy Disturbances [SMM Analysis]

According to SMM survey, the operating rate of secondary copper rod plants last week was 15.51% (surveyed enterprises: 18, capacity: 1.94 million mt/year), down 4.9 percentage points WoW. Last week, the average price difference between copper cathode rod and secondary copper rod was 706 yuan/mt, down 189 yuan/mt compared to 895 yuan/mt two weeks ago. The average discount of secondary copper rod against copper futures in Jiangxi last week was 248 yuan/mt, up 194 yuan/mt WoW.

According to SMM survey, the decline in the operating rate of secondary copper rod plants last week was due to the gradual restriction on the input invoice quota for secondary copper rod plants in Anhui, affecting continuous operations. Additionally, the prices of copper scrap and finished products remained inverted last week, with most secondary copper rod plants delivering 1-2 truckloads of finished products per day and preferring to purchase externally to fulfill orders. In November, the copper anode processing fee was 600 yuan/mt, the blister copper RC was 1,000 yuan/mt, while the secondary copper rod processing fees were compressed to 200 yuan/mt last week. However, secondary copper rod plants indicated that regardless of the finished product, production and sales would result in losses. Currently, they continue operations to fulfill long-term contracts; otherwise, they would prefer to shut down and resume production when the price difference between copper cathode and copper scrap widens. As of Friday, November 1, the price difference between copper cathode and copper scrap was 967 yuan/mt, up 157 yuan/mt WoW.

Looking ahead to this week, secondary copper rod plants expect the operating rate in November to be better than in October. As the year-end approaches, enterprises' bidding projects enter the delivery period, and end-use orders may improve.