On April 22, at the CCIE 2025 SMM (20th) Copper Industry Conference & Copper Industry Expo - Electric Power Transmission and Distribution Industry Forum, hosted by SMM Information & Technology Co., Ltd., SMM Metal Trading Center, and Shandong Aisi Information Technology Co., Ltd., with Jiangxi Copper Corporation and Yingtan Land Port Holdings Co., Ltd. as the main sponsors, Shandong Humon Smelting Co., Ltd. as the special co-organizer, and Xinhuang Group and Zhongtiaoshan Nonferrous Metals Group Co., Ltd. as co-organizers, Long Huachen, Senior Copper Analyst at SMM, analyzed the copper wire rod market in 2025 and provided an outlook for its future.
Chapter 1: Analysis of the Copper Cathode Rod Market in 2025
1.1 SMM Distribution Map of Copper Cathode Rod Capacity
SMM Forecast: In 2025, China's copper cathode rod capacity is expected to reach approximately 17.67 million mt.
East China and South China are both major consumption and production regions. East China accounts for 50.8% of the national copper rod production capacity, with Jiangsu Province accounting for 28% of the national capacity.
1.2 Continuous Release of New Capacity from 2023-2025, with Slowing Growth in Copper Cathode Rod Production
►SMM Analysis:
•From 2019 to 2025, China's copper cathode rod production capacity will increase from 11.5 million mt to 17.67 million mt, with a compound annual growth rate (CAGR) of 6.41%; production will increase from 7.18 million mt to 10.3 million mt, with a CAGR of 4.66%.
•With the commissioning of new copper cathode rod production capacity, the continuous release of additional capacity has made the industry's overcapacity situation more pronounced. It is expected that the production capacity will reach 17.67 million mt/year by the end of 2025, with additional capacity plans still in the pipeline.
1.3 Supply Surplus Puts Pressure on Copper Rod Processing Fees & Weak Consumption Leads to Lower-than-Expected Operating Rates for Copper Cathode Rods
►SMM Analysis:
•The copper rod industry has long suffered from overcapacity, putting pressure on processing fees. In 2024, the surge in copper prices had a significant impact on processing fees, leading to negative processing fees at one point when premiums and discounts were under pressure. Processing fees gradually returned to normal levels after copper prices pulled back from highs.
Chapter 2: Analysis of the Secondary Copper Rod Market in 2025
2.1 SMM Distribution Map of Secondary Copper Rod Capacity
SMM Forecast: In 2025, China's secondary copper rod capacity is expected to reach approximately 6.77 million mt, a decrease of 1.3 million mt from 8.07 million mt in 2024. Effective capacity is expected to be 4.89 million mt, a decrease of 650,000 mt from 5.54 million mt in 2024.
The main production regions are Jiangxi, Anhui, Hubei, and Henan. Jiangxi Province accounts for 34.22% of the national copper rod production capacity, while Anhui Province accounts for 18.28%.
2.2 Continuous Decline in Operating Rates in the Secondary Copper Rod Industry
►SMM Analysis:
•Reverse Invoicing: The State Taxation Administration announced that, starting from April 29, 2024, qualified resource recycling enterprises can issue invoices to natural persons selling scrap products, implementing "reverse invoicing." This measure aims to promote resource recycling and reuse while optimizing tax collection and administration.
•Fair Competition Review Regulations: On June 13, 2024, the State Council issued the "Fair Competition Review Regulations" (hereinafter referred to as the "Regulations"), which will come into effect on August 1, 2024. The main entities subject to fair competition review include administrative organs and drafting units, covering laws, administrative regulations, local regulations, rules, normative documents, and specific policy measures involving the economic activities of operators.
2.3 Changes in the Secondary Copper Rod Industry: Shift Towards Producing Copper Anodes
►SMM Analysis:
•A relatively high proportion of domestic copper anode production capacity uses secondary copper as raw material. The total sample capacity of SMM is 3.31 million mt, with a sample capacity of 2.04 million mt for copper anode made from scrap, accounting for 61.6%. This capacity is mainly distributed in Jiangxi Province (45%), but the actual capacity utilization rate is low.
2.4 Analysis of Production Costs for Secondary Copper Rods and Copper Anodes
►SMM Analysis:
•Production costs for secondary copper rods (excluding production losses): 583 yuan/mt; production costs for copper anodes (excluding production losses): 468 yuan/mt
•Key Factors Influencing Production Preferences of Secondary Copper Rod Plants: The comparison between the discounts for secondary copper rods (e.g., 1,200 yuan/mt) and copper anodes (e.g., 500 yuan/mt). The product with the smaller discounts is more likely to be produced.
Chapter 3: Outlook for the Future Copper Rod Market
3.1 No Recovery of Infrastructure and Real Estate Markets on the Horizon
►SMM Analysis:
•The growth rate of fixed asset investment has been declining year by year, and the growth rate of real estate completion areas has dropped sharply; it is difficult for the traditional industries to replicate their past glory in terms of copper rod consumption.
3.2 Accelerated Growth in Power Grid Investment and Steady Growth in the New Energy Industry
This section elaborates on factors such as the completion amount of State Grid Corporation of China's investment and construction, copper tender volumes, NEV sales in recent years, and the installed capacity of wind and PV new energy sources.
3.3 Exploring Export Opportunities for Copper Cathode Rods and Shifting Secondary Copper Rod Production Towards Copper Anodes
•In 2024, copper rod exports increased significantly. Attention should be paid to whether this high growth can be sustained after the cancellation of export tax rebates.
•With tight supply of copper concentrates in China and increased demand for copper anodes, more secondary copper rod enterprises are expected to shift their production towards copper anodes.
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