Recently, the secondary copper rod market is at a critical stage where policy adjustments and market fundamentals are interacting. According to the latest data, the operating rate for secondary copper rod this week was 22.67%, up significantly by 9.15 percentage points WoW and also rising 10.38 percentage points YoY. This change was mainly driven by the resumption of normal operations by enterprises in Tianjin and Anhui.

[SMM Analysis:China's copper concentrate imports are expected to increase by 7.8% year-on-year in 2025. How will spot TC for copper concentrate play out in the fourth quarter?] As September comes to a close, the copper industry is about to welcome the LME London Metal Week and the annual long-term contract negotiations of Chinese smelters. Predictions for China's copper concentrate import volume in the fourth quarter, the trend of spot TC, and the outcomes of long-term contract negotiations have become focal points of market attention. SMM provides possible scenarios for market reference.

This week, the secondary copper rod market exhibited a complex situation under the dual influence of macro policies and price fluctuations. After the US Fed announced a 25bp interest rate cut in September, the exhaustion of positive factors triggered profit-taking and capital outflows, leading to a significant pullback in copper prices, with a cumulative decline of over 1,000 yuan/mt by Thursday this week. The price of bare bright copper in Guangdong was reported at 73,500–73,700 yuan/mt, down 900 yuan/mt WoW. The rapid pullback in copper prices reduced suppliers' willingness to sell recycled copper raw materials, and the supplier sentiment index compiled by SMM fell from 2.29 to 2.26.

[SMM Analysis:Turning point emerges in the smelting acid market; sulfuric acid revenue may struggle to support high-load copper smelting.] The decline in acid prices has a more profound impact on the copper smelting industry. This year, despite three major pressures—a sharp drop in TC for copper concentrate, high raw material costs, prolonged unfavorable domestic-to-international price ratios, and increased capital occupation costs for raw material procurement—copper smelters consistently increased electrolytic copper production from January to August. This was largely supported by sulfuric acid revenue, as producing one ton of electrolytic copper simultaneously yields 3-4 tons of smelting acid. The revenue from sulfuric acid essentially offset the negative effects of the TC plunge. However, it is foreseeable that smelting acid prices in the fourth quarter may struggle to strongly support copper smelters' production activities. Smelters will face multiple challenges: spot TC remaining persistently between -$40 to -$50, high raw material costs, declining revenue from by-product sulfuric acid, expected reduced production of waste-derived electrolytic copper due to Policy Document 770, and maintenance activities at 10 smelters. These factors are likely to collectively lead to a deterioration in copper smelters' operating rates.

[SMM Shanghai Spot Copper] Looking ahead to next week, copper prices returning to around 80,000 yuan/mt again has weakened market purchasing sentiment. However, with the National Day holiday approaching, downstream stockpiling activities will keep the premiums firm, and transactions are expected to remain stable above parity.

This week, the machine operating rate continued to rebound to...