Economic Benefits of Secondary Copper Rods Diminish, Social Inventories Increase in Various Regions [SMM Analysis]

SMM March 1 News:

      This week, the social inventories of secondary copper rods in various regions increased to varying degrees, with most areas approaching normal inventory levels. The social inventory of secondary copper rods in Ningjin increased significantly, mainly due to restocking by traders after copper prices pulled back, leading to a steady rebound in inventory levels. In Jiangsu, the inventory remained unchanged as many enterprises in east China preferred copper cathode rods. During the week, the price spread between copper cathode rods and secondary copper rods was only 700-800 yuan/mt, completely eroding the economic advantage of secondary copper rods. As a result, new orders from Jiangsu traders and wire and cable enterprises were limited, and the social inventory of secondary copper rods in Jiangsu did not change significantly. In Guangdong, the increase in social inventory of secondary copper rods was also attributed to weak demand from wire and cable enterprises. According to interviewed wire and cable enterprises, the recovery of new orders after the Lantern Festival was slow, with an operating rate of only around 40%, leading to an increase in the social inventory of secondary copper rods in Guangdong.

       The price spread between copper cathode rods and secondary copper rods continued to remain below the advantageous threshold, and new orders from wire and cable enterprises were limited. The social inventory of secondary copper rods is expected to continue increasing.

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