Since the beginning of 2024, the end-use real estate sector has continued to drag down consumption, the copper rod industry capacity has been continuously released, and high copper prices have intensified cut-throat competition within the industry. The copper rod industry is facing increasingly severe challenges, but there are also certain opportunities in the export market. Against this backdrop, to better respond to market changes and serve the market, SMM invited core decision-makers from copper cathode rod enterprises to organize an industry council meeting. SMM reviewed major events in the raw material spot market, analyzed the spot market structure, shared opinions on preparations for 2025 amid losses of long-term contracts within the year, analyzed copper rod consumption, discussed the performance of competing products, and reported the export situation. Core decision-makers from copper cathode rod enterprises had frank exchanges on the challenges and issues facing the current copper rod industry, exchanged valuable opinions, and discussed key issues and future market outlooks. How should the current difficulties be addressed? Below is a summary of the core viewpoints from the meeting.
Based on the discussions of core decision-makers at the council and SMM survey, the current copper cathode rod industry is facing common pain points and difficulties, as detailed below:
1. According to SMM statistics, from 2019 to 2024, China's copper cathode rod capacity will increase from 11.5 million mt/year to 16.87 million mt/year, with new capacity continuously being released, further intensifying cut-throat competition in the copper rod industry. According to SMM forecast, domestic copper cathode rod capacity will continue to grow, reaching 17.67 million mt/year by 2025. Under the pressure of increasing cut-throat competition, the operating rate of the copper cathode rod industry in 2024 is expected to decline by 3.69 percentage points YoY. In 2024, the operating rate and inventory are under pressure, making it difficult to achieve production targets, which is a common issue in the copper rod industry.
2. In 2024, as copper prices soar, costs across the industry chain increase, profit margins are continuously compressed, and the copper cathode rod processing fee is under constant pressure, only recovering to normal levels after a significant drop in copper prices. Meanwhile, due to increased cost pressure and large fluctuations in copper prices, downstream sentiment in the copper rod industry remains cautious, showing increasingly prudent attitudes in transactions, which also increases the pressure on copper cathode rod enterprises to sell products.
3. In 2024, frequent occurrences of long-term contract defaults, shrinking survival space, and price wars highlight the disadvantages of the copper cathode rod industry as an intermediate link with surplus capacity and weak bargaining power in extreme market conditions.
Facing various difficulties, copper cathode rod enterprises have also seized increased opportunities this year, actively seeking breakthrough strategies. The opportunities and changes in the landscape of copper cathode rod enterprises within the year are as follows:
1. On May 11, Document No. 783 was released, and since the end of July, the operating rate of the secondary copper rod industry has remained sluggish, with no significant recovery trend within the year. The reduction in the supply of secondary copper rods has boosted the operating rate of many copper cathode rod enterprises, mainly in marginal areas and small to medium-sized enterprises.
2. Under the impact of extreme market conditions, copper cathode rod enterprises have begun to seek more stable downstream enterprises, paying more attention to industry orders from previously less related sectors.
3. The surplus capacity in the low-oxygen rod market continues to worsen. In 2024, the oxygen-free rod market has shown relatively stable advantages, with many low-oxygen rod enterprises starting to enter the oxygen-free rod market, increasing deep processing businesses, and gradually putting them into production in the latter half of 2024.
4. With severe cut-throat competition domestically and the opening of the export window, the market is generally concerned about the export market situation of copper rods. Both trading companies and copper cathode rod producers are expanding their existing export businesses or seeking export channels. By September 2024, the export volume of copper rods has significantly increased YoY.
Enhancing strength in cut-throat competition and seeking breakthroughs in difficulties, the copper rod industry is continuously looking for new market opportunities. Looking ahead, with the US election results announced and domestic demand awaiting further boosts, what challenges and opportunities will the market face? SMM will continue to keep you updated.
![[ Анализ SMM ] Наглядное руководство по полугодовым отчетам 19 медеплавильных заводов за 2026 год](https://imgqn.smm.cn/usercenter/gCNEi20251217171715.jpeg)
