Chinese New Year and Copper Prices Exert Dual Pressure, Copper Cathode Rod Production Remains Low, January-February [SMM Analysis]

According to SMM data, the national copper cathode rod production in January 2025 totaled 716,000 mt, down 181,700 mt MoM, with an operating rate of 51.99%, a decrease of 16.38 percentage points MoM and 11.9 percentage points YoY. Among them, the total copper rod production in east China was 478,900 mt, with an operating rate of 58.47%, down 9.16 percentage points YoY; in south China, the total copper rod production was 106,300 mt, with an operating rate of 46.64%, down 16.76 percentage points YoY. (For production and operating rate data in other regions, please refer to the SMM database.) In January, the festive atmosphere of the Chinese New Year gradually intensified, while the center of copper prices rose, suppressing downstream buying interest. According to SMM data, the average price of SMM #1 copper cathode in January was 75,023.61 yuan/mt, up 581.56 yuan/mt MoM. The price spread between copper cathode rods and secondary copper rods also widened by 412 yuan/mt MoM. Consumption gradually weakened towards the end of January, entering the Chinese New Year holiday, during which copper cathode rod production generally halted, leading to a MoM decline in production. From the overall operating rate perspective, the operating rate in January 2025 decreased by 11.9 percentage points YoY but increased by 11.97 percentage points MoM compared to February 2024 on a lunar calendar basis. The main factor for this discrepancy was the different time spans of the Chinese New Year. Looking at the average operating rate for January-February 2025, it is expected to be 52.78%, a slight YoY increase of 0.82 percentage points. The Year-End Effect in February Is Yet to Fade, and Production Is Expected to Rebound Slightly In February, the holiday atmosphere gradually dissipates, and most copper rod enterprises resume production before the Lantern Festival. However, the first ten days of February still fall within the Chinese New Year holiday, making the actual number of production days similar to January. Therefore, the national copper cathode rod production in February is expected to reach 737,700 mt, with an operating rate of 53.56%, remaining at a relatively low level. From the consumption side, due to the post-holiday surge in copper prices, end-use consumption is recovering slowly, and new orders are currently sluggish. If copper prices do not show a significant decline, some restocking demand may be released after the Lantern Festival at the earliest.