October Copper Wire Rod Exports Increased Both YoY and MoM, Short-term Export Rush May Lead to Continued Increase in November Exports [SMM Analysis]

According to the latest customs data, in October 2024, China's exports of copper wire with a maximum cross-sectional dimension >6mm reached 5,017.2 mt, up 22.8% MoM and 47.4% YoY, with cumulative exports from January to October 2024 reaching 51,000 mt (HS code 74081100).

Copper wire rod exports to the top ten countries in October showed an upward trend. Notably, exports to Malaysia and Indonesia increased significantly, up 150% and 560% YoY, and 159% and 145% MoM, respectively. It is worth noting that in October 2023, exports to Saudi Arabia, Uganda, Australia, and Tanzania were zero. However, in October 2024, these four countries jumped into the top ten export destinations for China's copper wire rod. Additionally, in H1 2024, exports to Uganda reached 27.8 mt and to Australia 24 mt. In October, the export volumes to these two countries significantly surpassed the total for H1, showing strong growth momentum.

Data source: China Customs

Specifically, the export volume of copper wire rods rebounded MoM in October. From the perspective of the SHFE/LME price ratio, the average import profit in September was 202.3 yuan/mt, while in October, it was 180.4 yuan/mt, down 21.9 yuan/mt MoM, which was favorable for copper wire rod exports. Some enterprises are delivering this year's long-term contracts, which has driven the increase in export volumes.

Entering November, the import window remains open, and the appreciation of the yuan poses unfavourable factors for copper wire rod exports. However, on November 15, the Ministry of Finance and the State Administration of Taxation announced that starting from December 1, the export tax rebate for products such as aluminum semis and copper semis will be canceled, which will have a profound impact on copper wire rod exports. From January to October 2024, 96.5% of copper wire rod exports were conducted through Ordinary Trade.

After the policy implementation, the cost of these export orders is expected to increase by 13%. In the short term, many enterprises are rushing to export and producing at full capacity before the policy takes effect, which will supplement export volumes to some extent. It is expected that copper wire rod exports in November may see a significant increase. However, in the long term, according to SMM, major copper wire rod exporting enterprises plan to fully shift their existing Ordinary Trade orders to processing trade in 2025. Whether the total export volume will significantly shrink in the future remains to be closely monitored, particularly the signing of long-term contracts. SMM will continue to keep you updated.