The Difficult Balance Between Policy Uncertainty and Price Volatility

In October 2025, the secondary copper rod market struggled under multiple pressures including policy uncertainty, volatile copper prices, and weak end-use demand, generally characterized by an operating rate fluctuating at lows, diverging profit margins, and regional structural adjustments. The average monthly operating rate for the secondary copper rod industry saw a slight rebound to 26.46% compared to September, but still decreased 2.61 percentage points YoY, reflecting insufficient market recovery momentum. At the beginning of the month, affected by the Mid-Autumn and National Day holidays combined with a sharp surge in copper prices, the weekly operating rate of enterprises once hit a bottom of 11.93%, with some companies opting for production halts and maintenance to mitigate risks. As the holidays ended and copper prices staged a pullback, the operating rate gradually recovered to 22.8% in the middle and late parts of the month, yet the monthly average remained below the level typical for the traditional peak season. The price difference between copper cathode rod and secondary copper rod showed significant fluctuations, with the monthly average widening to over 1,700 yuan/mt, peaking at 1,848 yuan/mt, which provided economic advantages for secondary copper rod. However, limited new orders from end-use wire and cable enterprises prevented the price spread advantage from effectively translating into actual consumption.

Policy uncertainty became the core factor constraining market vitality. Local incentive policies related to Notice No. 770 remained unclear in major production areas such as Jiangxi and Anhui, leading many secondary copper rod enterprises to maintain a wait-and-see stance. In Jiangxi, a concentrated capacity region, corporate production strategies turned conservative: on one hand, shifting to anode plate production to maintain basic operations, and on the other, strictly purchasing imported recycled copper raw materials with invoices to avoid tax risks. This resulted in an actual contraction in secondary copper rod supply, with orders shifting to regions like Hubei where policies were relatively stable, prompting local enterprises to temporarily increase furnace operations. The import market also faced pressure, as customs in areas like Guangdong and Ningbo strengthened inspections of recycled copper raw materials, extending clearance cycles by 15-30 days, which exacerbated difficulties in procuring tax-included raw materials.

Supply-demand imbalance persisted throughout the month. On the supply side, suppliers of recycled copper raw materials held back sales when copper prices surged, leading to tight circulating supply. On the demand side, weakness continued, with no improvement in orders from end-use sectors such as construction and home appliances. Downstream enterprises showed low acceptance of high-priced copper rods, mostly purchasing as needed. Although the gross sales profit margin for secondary copper rod reached a weekly high of 1,602 yuan/mt, the issue of accumulating finished product inventories became prominent, with sample enterprise inventories rising to 3,560 mt by month-end, up 980 mt MoM, reflecting the dilemma of "price without market." Market divergence intensified: copper cathode rod enterprises saw their operating rates decline due to order diversion, while secondary copper rod, despite having cost advantages, was constrained by policies and demand, making it difficult to achieve volume expansion. Looking ahead to November, the market is expected to seek a new balance amid policy clarity and price adjustments. As copper prices retreat from highs (with the anticipated trading range shifting lower), end-users may find a restocking window, stimulating a slight rebound in the operating rate of secondary copper rod. If the details of Notice No. 770 are implemented, enterprises in Jiangxi, Anhui, and other regions may gradually resume production, driving raw material procurement demand. However, the historical off-season effect cannot be overlooked: falling temperatures in northern regions will curb outdoor construction, making it difficult for cable consumption to improve significantly, and limiting room for the price difference between primary metal and scrap to widen. The operating rate of secondary copper rod is projected to show a "low first, high later" trend in November, but regional supply-demand mismatches will persist. Enterprises should closely monitor copper price trends and policy developments, striving to balance just-in-time procurement with inventory control to navigate structural opportunities and risks in a volatile market.