Weak End-Use Demand, Brass Billet Operating Rate Expected to Decline Further

According to local media in the DRC on July 10, the country’s General Directorate of Taxes (DGI) sealed off some offices and facilities of Kamoto Copper Company (KCC) in Kolwezi, Lualaba Province, on July 9. The DGI stated that KCC is involved in a tax arrears situation of nearly $3 billion. The sealing action led to the evacuation of some personnel, and copper and cobalt production at the affected sites was temporarily suspended. The exact scope of the sealing, its duration, and the actual impact on the mine and smelting systems remain to be further confirmed. As SMM has learned, KCC’s copper cathode production over the past two years has been around 190,000 mt each year. If the sealing measures persist and materially affect production or product deliveries, it is expected to cause periodic disruptions to copper and cobalt supply from the DRC. Going forward, close attention should be paid to the resumption of KCC’s operations and the progress of the tax dispute resolution.

[SMM Analysis: H1 2026 Secondary Copper Rod Market Semi-Annual Report: Compliance Reshapes Pricing Logic, Supply-Demand Standoff Throughout] In H1 2026, the secondary copper rod market completely broke away from the traditional pricing framework of "copper prices – supply and demand." It was primarily impacted by the dual policy shocks of "reverse invoicing" moving from transitional verification to full implementation and the clearance of local irregular fiscal and tax incentives (Document No. 770), coupled with wide fluctuations as the most-traded SHFE copper contract retreated from the record high of 113,800 yuan/mt at the start of the year and consistently held the threshold of 100,000 yuan/mt in mid-year. The entire industry found itself in a deep stalemate characterized by "policies setting the structure, invoices locking in transactions, and copper prices setting the pace," with the operating rate plunging sharply YoY, and enterprises generally walking a tightrope between compliance pressure and weak demand.....