Post-Holiday Operating Rate of Copper Anode Enterprises Rebounds, but the Outlook for Raw Material Supply Remains Grim[SMM Analysis]

SMM March 12 News:

According to SMM, the operating rate of Chinese copper anode producers in February 2025 was 43.86%, down 8.4 percentage points MoM. By raw material, the operating rate of copper anode producers using ore was 78.34%, down 3.53 percentage points MoM, while that of copper anode producers using scrap was 29.15%, down 4.67 percentage points MoM (only referring to non-self-use copper anodes).

In February 2025, the operating rate of Chinese copper anode producers using ore declined, mainly due to the shorter number of days in February and the statistical cycle. Although the spot TC of copper concentrates continued to fall, it has not yet led to a reduction in the production of copper anodes made from ore. The decline in the operating rate of copper anode producers using scrap was attributed to most enterprises entering the Chinese New Year holiday around January 22-23 and resuming operations around February 5 and February 13, resulting in fewer production days in February compared to January.

SMM expects the overall operating rate of Chinese copper anode producers to rise by 12.16 percentage points MoM to 56.02% in March 2025, with the operating rate of copper anode producers using ore at 82.83%, up 4.49 percentage points MoM, and that of copper anode producers using scrap at 44.59%, up 15.44 percentage points MoM.

The operating rates of both copper anode producers using ore and scrap are expected to rebound in March. Copper anode producers using ore are expected to maintain stable production after excluding the factors of production days and statistical cycles. For copper anodes made from scrap, the increase in production days is expected to significantly boost the monthly operating rate, and most enterprises currently have sufficient raw material inventory to meet March production needs. However, copper prices are expected to jump initially and then pull back in March, while domestic secondary copper raw material inventories remain low. Additionally, the severe inversion of the SHFE/LME price ratio after mid-February has led to production losses for enterprises. Coupled with the earlier suspension of US scrap copper imports by some traders due to the announcement of additional tariffs on Chinese imports, the import volume of scrap copper raw materials has significantly declined. Furthermore, the transition of the "reverse invoicing" policy has also impacted some enterprises. Therefore, the supply outlook for secondary copper raw materials remains pessimistic, which may lead to a decline in the operating rate of copper anode producers using scrap in the future.