[SMM Analysis] Copper scrap rods beat electrolytic copper rods. The operating rate of electrolytic copper rod enterprises in the whole country is declining rapidly.

SMM7 March 24:

With the continuous rise of copper prices, the price gap of processing fees for fine waste copper rods has expanded rapidly recently, resulting in downstream cable enterprises switching to waste copper rods one after another, resulting in a rapid decline in the operating rate of electrolytic copper rod enterprises.

As far as we know from our SMM survey, the processing fee for electrolytic copper pole across the country on Friday is: East China 8mm power industry rod processing fee is 600mur700 yuan / ton, the average price is 5 yuan / ton higher than last Friday; Guangdong 8mm power industry rod processing fee is 480mur650 yuan / ton, the average price is 30 yuan / ton lower than last Friday; North China 8mm power industry rod processing fee is 500mur550 yuan / ton, the average price is 50 yuan / ton lower than last Friday; The processing fee for poles used by the 8mm power industry in Southwest China is 730mur780 yuan / ton, which is 5 yuan / ton higher than that of last Friday. Generally speaking, the processing fee of copper rod in southwest China is the highest and that in North China is the lowest. The detailed trend is shown in the following figure:

Overall, although the electrolysis copper rod processing fees are lower than the previous high, but the decline is not large, generally still more than 500 yuan / ton. However, the processing fee for scrap copper rod is even more fluctuating. take the Guangdong market as an example, the processing fee for 8mm scrap copper rod was 600yuan / ton at the beginning of April, but now it has dropped to 1000 yuan / ton, a drop of as much as 1600 yuan / ton, and the price difference between the processing fee for fine copper rod has also widened to about 1500 yuan / ton. See the following picture for details

In the face of such a large price difference, downstream cable factories have switched to purchasing scrap copper poles, and some scrap copper rod enterprises have told us that they are all producing at full capacity recently, and it will take at least 4 days for orders to be placed on the same day before delivery. On the other hand, most of the electrolytic copper rod enterprises are generally understarted, and the operating rate is generally 20% lower than before. We expect this situation to continue in the short term and there will be no significant change.