Yard Stands Firm on Quotes for Sales, Profit Margins of Secondary Copper Rod Enterprises Under Pressure [SMM Secondary Copper Daily Review]

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SMM, February 18

      The futures closed at 76,820 yuan/mt at 11:30 today, down 270 yuan/mt from the previous trading day. The average spot premiums/discounts stood at -105 yuan/mt, down 225 yuan/mt from the previous trading day. The price of secondary copper raw material fell by 300 yuan/mt MoM today. The price of Guangdong bare bright copper was 70,400-70,600 yuan/mt, down 300 yuan/mt from the previous trading day. The price difference between primary metal and scrap was 1,715 yuan/mt, down 176 yuan/mt MoM. The price spread between primary and secondary copper rods was 685 yuan/mt. According to the SMM survey, as copper prices pulled back, secondary copper raw material suppliers reported difficulties in purchasing, leading to a reduction in the supply of secondary copper raw materials in the market. With suppliers standing firm on quotes, the gross profit of secondary copper rod plants dropped from 1,250 yuan/mt to 750 yuan/mt. If copper prices continue to pull back, the profit margin of secondary copper rod enterprises will be further compressed.