Refined Copper Rod Exports Steadily Increased YoY in January-February: Is Processing Trade a Flash in the Pan or the Future Mainstream? [SMM Analysis]

Since the end of November 2024, the export market for copper wire rod has gradually transitioned from Ordinary Trade to processing trade. Whether the exponential growth in processing trade is a temporary response to market changes or the future mainstream of the market, the import and export data for January-February 2025 released by the customs platform will be analyzed by SMM in combination with the actual market situation as follows: According to customs data, after the exports of refined copper rod (>6mm) under processing with imported materials and processing with supplied materials increased by 12.2 and 9.4 times MoM in December, the volume of processing trade continued to grow in January-February, with the total volume increasing month by month. Specifically, the total exports of refined copper rod (>6mm) in January 2025 increased to 4,364.3 mt from 3,903.1 mt in December 2024, up 11.8% MoM. In February 2025, the total exports of refined copper rod (>6mm) further increased by 14.6% MoM from January 2025. The total exports of refined copper rod (>6mm) in January-February 2025 reached 9,364.65 mt, up 43.9% YoY from January-February 2024. Notably, driven by policy, significant changes occurred in the volumes of processing with imported materials, processing with supplied materials, and Ordinary Trade. In January-February 2025, the exports of refined copper rod (>6mm) under processing with imported materials reached 8,844 mt, up nearly 105 times YoY, while the exports under processing with supplied materials increased from 0 to 45 mt, and the volume of Ordinary Trade was only 2% of the same period. Additionally, the volume of Entrepot Trade by Customs Special Control Area decreased to 0 in February as the market adjustment period ended. On the other hand, the exports of refined copper wire (≤6mm) in January-February 2025 also showed significant growth compared to December 2024, with increases of 60% and 7% MoM in January and February, respectively. On a YoY basis, the total exports of refined copper wire (≤6mm) in January-February 2025 increased by 51.47% YoY from January-February 2024. Similarly, driven by policy, the volumes of processing with imported materials, processing with supplied materials, and Ordinary Trade for refined copper wire (≤6mm) in January-February 2025 also showed significant changes. The exports of refined copper wire (≤6mm) under processing with imported materials reached 7,668.2 mt, up 12.4 times YoY, while the exports under processing with supplied materials increased by 18.69% YoY, and the volume of Ordinary Trade decreased by 57% YoY. In summary, based on the data and actual market situation, the export market for copper wire rod has now fully transitioned to processing trade, not just a temporary phenomenon under the change in tax policy. Mainstream enterprises in the market have basically maintained stable export volumes, and as more refined copper rod enterprises apply for processing manuals and actively expand overseas markets, coupled with the significant increase in oxygen-free rod exports, the export volume in January-February 2025 maintained growth both YoY and MoM. With the export window open, it is expected that high export volumes can be maintained in the future, and the export volume of copper wire rod in 2025 may achieve a total volume similar to 2024, excluding the impact of policy changes.