The supply of secondary copper raw materials decreased, and the operating rate of copper anode producers using scrap is expected to decline in April【SMM Analysis】

SMM April 14 News:

According to SMM, the operating rate of Chinese copper anode producers in March 2025 was 56.17%, up 12.31 percentage points MoM. By raw material, the operating rate of copper anode producers using ore was 69.90%, down 8.44 percentage points MoM, while that of copper anode producers using scrap was 49.65%, up 20.50 percentage points MoM (only referring to the non-self-use copper anode portion).

In March 2025, the operating rate of Chinese copper anode producers using ore continued to decline. Amid the persistent tightness in the copper concentrate market and the continuous decline in spot TC, some producers using copper ore to make copper anode experienced a drop in production due to raw material and cost issues. However, considering the raw material inventory levels of these producers, a significant reduction in copper anode production using ore is not expected in H1 2025. The operating rate of copper anode producers using scrap rebounded sharply in March, mainly due to the rise in copper prices in mid-March and the increase in domestic secondary copper raw material supply. The high copper prices at that time suppressed downstream consumption, leading to poor performance in secondary copper rod prices, prompting many producers to shift their capacity to anode plate production.

SMM expects the overall operating rate of Chinese copper anode producers in April 2025 to decline by 7.37 percentage points MoM to 48.80%. Among them, the operating rate of copper anode producers using ore is expected to rise by 0.86 percentage points MoM to 70.76%, while that of copper anode producers using scrap is expected to drop by 11.30 percentage points MoM to 38.35%.

The operating rate of copper anode producers using ore is expected to rebound slightly in April. The production schedule of these producers remains relatively stable overall, with some producers adding anode plate production. However, the operating rate of copper anode producers using scrap is expected to drop significantly due to macro market disturbances. After the Qingming Festival, copper prices plummeted, and scrap copper suppliers held back cargoes, leading to a rapid decline in secondary copper raw material supply. Additionally, the massive sell-off of scrap copper inventories in mid-to-late March, coupled with a gap in imports from the US, made it difficult for producers to procure raw materials while facing losses. The future direction of copper prices will be a key factor influencing the market. If copper prices fail to rebound, some producers may be forced to cut or halt production after depleting their raw material inventories.