Slow Recovery of Secondary Copper Rod Industry; New Orders Await Boost from Downstream Recovery [SMM Analysis]

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       After the Chinese New Year holiday, the secondary copper rod industry has gradually resumed production over the past week. This week, SMM investigated the resumption status of domestic secondary copper rod enterprises, as detailed below:

       According to SMM, most secondary copper rod enterprises resumed operations on February 5 (the eighth day of the lunar calendar). However, as of February 12, the resumption has only lasted about a week. Enterprises reported that the progress of resumption has been relatively slow, mainly due to two reasons: first, non-local employees have not fully returned to work; second, copper prices have fluctuated at highs due to the impact of Trump's tariffs, which has also driven up the prices of secondary copper raw materials. Additionally, SMM learned that some secondary copper raw material suppliers did not resume operations until the Lantern Festival, resulting in relatively tight copper scrap supply in the market, further constraining the pace of production recovery for enterprises.

       Regarding inventory and new orders, before the holiday, due to high copper prices, enterprises were generally reluctant to stockpile, fearing the risk of capital occupation from inventory accumulation and holding a bearish outlook on the market. After the holiday, as most downstream enterprises are expected to resume operations after the Lantern Festival, most secondary copper rod enterprises indicated that new orders over the past week have not been optimistic. However, looking ahead to next week, with the full recovery of the downstream industry chain, enterprises' order conditions are expected to gradually improve.