End-User Consumption Remains Sluggish; Inventory Buildup of Secondary Copper Rod Finished Products [SMM Weekly Review on Secondary Copper Rod]

SMM, February 14:

      According to the latest survey data from SMM, the operating rate of secondary copper rod reached 18.96% this week, up 15.65 percentage points WoW and 10.71 percentage points YoY. This week, the average price spread of refined and secondary copper rods was 1,153 yuan/mt, an increase of 89 yuan/mt WoW. Meanwhile, the average discount of secondary copper rod in Jiangxi against copper futures was 580 yuan/mt, narrowing by 100 yuan/mt MoM.

        Some secondary copper rod enterprises resumed production after the Lantern Festival. Despite a slight correction in copper prices, these enterprises struggled to procure sufficient low-cost secondary copper raw materials as suppliers insisted on high prices, making it difficult to resume normal production in the short term. Enterprises that have resumed normal production reported that the current high copper prices have reduced end-users' willingness to restock, and most downstream customers, due to limited new orders, are not actively purchasing secondary copper rods. This week, the finished product inventories of secondary copper rod enterprises reached 2,800 mt, an increase of 1,000 mt WoW (of the 6,100 mt of finished product inventories last week, 4,300 mt were post-holiday shipments).

        Regarding the "reverse invoicing" policy, due to varying levels of enforcement across regions, a unified national standard has yet to be established, leading to differences in the pricing methods of secondary copper rod enterprises. According to relevant guidelines, 2025 is designated as a transition year, during which secondary copper rod enterprises are required to improve their software and hardware configurations for "reverse invoicing." Starting in 2026, the policy will be fully implemented, and strict supervision of enterprises' compliance will be enforced nationwide.

        Looking ahead to next week, secondary copper rod enterprises across the country are expected to gradually resume normal production, and the operating rate of secondary copper rods is expected to continue rebounding.

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