SMM, March 14:
According to SMM survey data, the operating rate of secondary copper rod enterprises this week was 30.88%, down 2.52 percentage points WoW and 18.45 percentage points YoY. Meanwhile, the average price spread of secondary and copper scrap rods this week was 1,403 yuan/mt, up 345 yuan/mt WoW. Additionally, the average discount of secondary copper rod in Jiangxi against copper futures was 853 yuan/mt, expanding by 195 yuan/mt WoW.
The slight decline in the operating rate of secondary copper rods was mainly due to weak market demand, with some copper rod enterprises shifting to anode plate production. However, as copper prices rose significantly, traders accelerated cargo pick-up, leading to a reduction in finished product inventories of secondary copper rod enterprises from 4,440 mt last week to 3,960 mt this week. With the alleviation of inventory pressure, enterprises resumed secondary copper rod production, causing raw material inventories to decrease from 4,690 mt last week to 4,270 mt this week. By the weekend, the price spread of secondary and copper scrap rods (including tax) had expanded to over 2,000 yuan/mt, and some enterprises reported an increase in trader orders, even requiring production scheduling.
Regarding the implementation of "reverse invoicing," interviewed enterprises stated that they are actively advancing related work and continuously increasing the proportion of "reverse invoicing." Some enterprises noted that for the relevant tax payments next month, the input portion not covered by "reverse invoicing" will need to be supplemented at a 2% fixed levy rate. Therefore, most enterprises are actively responding to and implementing the policies related to "reverse invoicing."
Looking ahead to next week, traders' active cargo pick-up is expected to prompt many secondary copper rod enterprises to increase production, with the operating rate anticipated to rebound to 34.6%.
