Raw material inventory is relatively abundant, and the operating rate of secondary copper rod plants has slightly increased [SMM Weekly Review of Secondary Copper Rod]

Published: Jul 11, 2025 13:59

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[SMM Analysis: Raw Material Inventory Relatively Abundant, Operating Rate of Secondary Copper Rod Producers Inches Up] According to SMM's survey data, the operating rate of secondary copper rod producers this week was 25.45%, up 0.66 percentage points WoW and down 3.05 percentage points YoY. Meanwhile, the average price difference between copper cathode rod and secondary copper rod was 991 yuan/mt this week, narrowing by 558 yuan/mt MoM. In addition, the average discount of secondary copper rod against copper futures in Jiangxi was 532 yuan/mt, narrowing by 386 yuan/mt MoM...

SMM News on July 10:

According to SMM survey data, the operating rate of secondary copper rod enterprises this week was 25.45%, up 0.66 percentage points WoW and down 3.05 percentage points YoY. Meanwhile, the average price difference between copper cathode rod and secondary copper rod was 991 yuan/mt this week, narrowing by 558 yuan/mt MoM. Additionally, the average discount of secondary copper rod against copper futures in Jiangxi was 532 yuan/mt, narrowing by 386 yuan/mt MoM. Based on SMM's calculation of the gross profit model for secondary copper rod sales, the gross profit for the week was -329 yuan/mt, expanding by 283 yuan/mt MoM.

According to SMM survey, due to the decline in copper prices, holders of secondary copper raw materials panicked and sold off their inventory. With relatively loose raw material inventories at secondary copper rod enterprises, the number of operating days increased. The weekly finished product inventories of sampled secondary copper rod enterprises stood at 5,450 mt, up 250 mt MoM. The pullback in copper prices significantly narrowed the price difference between copper cathode rod and secondary copper rod, completely eroding the economic benefits of secondary copper rod. Wire and cable enterprises did not consider purchasing secondary copper rod. Additionally, some traders in the market had previously engaged in hedging operations and made substantial profits amid the decline in copper prices. When selling copper cathode rod, they offered discounts to the market, quoting prices at a 100 yuan/mt discount against futures contracts. Wire and cable enterprises rushed to purchase copper cathode rod from these traders. Secondary copper rod enterprises noted that while the pressure on raw material procurement had eased somewhat, the sales pressure in the copper rod market continued to intensify. If copper prices remain volatile in the short term, the finished product inventories of secondary copper rod enterprises may continue to rise.

Looking ahead to next week, secondary copper rod enterprises, in order to control finished product inventories amid insufficient end-use consumption, will have no choice but to offer deeper discounts to sell to traders.

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