Insufficient Workforce Arrival Leads to Slow Post-Holiday Recovery of Operating Rates in Secondary Copper Rod Enterprises [SMM Analysis]

SMM, February 9:

       According to SMM's survey data, the operating rate of secondary copper rod this week was 3.31%, up 3.31 percentage points WoW but down 1.06 percentage points YoY. The average price spread of secondary and copper scrap rods this week was 1,064 yuan/mt, down 155 yuan/mt WoW. Additionally, the average discount of secondary copper rod in Jiangxi against copper futures reached 680 yuan/mt, expanding by 124 yuan/mt WoW.

       Most secondary copper rod enterprises resumed normal administrative operations on February 5; however, full production staffing is expected after the Lantern Festival. Due to sufficient finished product inventories before the holiday, these enterprises are not in a hurry to resume production immediately. Many plan to start production this Saturday and Sunday, with copper rod output expected to begin next Monday. According to secondary copper rod enterprise managers, workers generally return fully after the Lantern Festival, while administrative staff, who returned on the eighth day of the lunar calendar, mainly focus on shipment tasks. In Guangdong, SMM's field trip to secondary copper raw material yards revealed that very few were open. Discussions with relevant personnel indicated that these yards would also resume operations after the Lantern Festival. It is expected that the full resumption of production workers at secondary copper rod enterprises and secondary copper raw material yards next week will boost the operating rate of secondary copper rod.

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