SMM, February 21:
According to SMM survey data, the operating rate of secondary copper rod enterprises this week was 30.75%, up 11.79 percentage points WoW and up 22.5 percentage points YoY. Meanwhile, the average price spread of refined and secondary copper rods this week was 921 yuan/mt, down 232 yuan/mt WoW. Additionally, the average discount of secondary copper rod in Jiangxi against copper futures was 580 yuan/mt, narrowing by 198 yuan/mt WoW.
The full resumption of production by secondary copper rod enterprises drove the rebound in operating rates. After the holiday, the increase in shipment orders from traders, coupled with the low stockpiling levels of terminal wire and cable enterprises before the Chinese New Year and the slow resumption of work this year, led to workers gradually returning after the Lantern Festival. As a result, terminal restocking demand increased significantly during the week, while a large amount of secondary copper rod supply was concentrated in the hands of traders. At the beginning of the week, secondary copper rod enterprises stood firm on quotes, and traders sold at high prices. Subsequently, by the end of the week, the discount of secondary copper rod in Jiangxi against copper futures widened, almost leveling with last week. Overall, despite weak end-use consumption affecting the demand for secondary copper rods from wire and cable enterprises, the low raw material inventory and rigid demand for production led to concentrated restocking by wire and cable enterprises, causing a short-term tight supply of secondary copper rods in the market. This week, the finished product inventories of secondary copper rods stood at 3,100 mt, up 300 mt WoW. Feedback from secondary copper rod enterprises indicated that although finished product inventories increased, most were pending shipment orders, with almost no self-owned finished product inventories.
Looking ahead to next week, as terminal wire and cable enterprises gradually complete their restocking, low order volumes are expected to reduce the demand for secondary copper rods, and the discount of secondary copper rod against copper futures may continue to widen.
