Market Structure Reversed in December, Copper Wire Rod Processing Trade Exports Up Tenfold MoM [SMM Analysis]

       According to the announcement by the Ministry of Finance and the State Administration of Taxation on Adjusting Export Tax Rebate Policies, starting from December 1, 2024, export tax rebates for aluminum semis, copper semis, and chemically modified animal, plant, or microbial oils and fats will be canceled. Since the end of November, the domestic copper wire rod export market has shifted from Ordinary Trade to Processing Trade, paving the way for future export market adjustments. Currently, the full-year 2024 import and export customs data has been updated. What are the actual market changes? Below is a detailed analysis:

       In December 2024, according to customs data, the total export volume of copper wire rods (>6mm) decreased from 6,304 mt in November to 3,903.1 mt, down 38% MoM. Under Ordinary Trade, export volume fell from 5,916.2 mt in November to 258.2 mt, down 95.6% MoM; under Processing with Imported Materials, export volume increased from 232.6 mt to 2,838.4 mt, up 12.2 times MoM; under Processing with Supplied Materials, export volume, which was 0 mt from January to October, rose from 15 mt in November to 140.8 mt, up 9.4 times MoM.

       According to customs data, the total export volume of copper wires (≤6mm) decreased from 8,325.9 mt in November to 4,627.4 mt in December, down 44.4% MoM. Under Ordinary Trade, export volume fell from 6,616.3 mt in November to 892.3 mt, down 86.5% MoM; under Processing with Imported Materials, export volume increased from 458.2 mt to 1,372.4 mt, nearly tripling MoM; under Processing with Supplied Materials, export volume decreased from 42.6 mt in November to 11.2 mt, down 73.8% MoM.

       Based on the above charts and detailed data, the trend shows that after entering December 2024, copper wire rod exports under Ordinary Trade have significantly decreased as expected, reaching the lowest level in two years. It is expected that in 2025, excluding the impact of unfinished long-term contracts from 2024, the decline will continue. Meanwhile, with the overall market shift in trade modes and more enterprises applying for processing manuals, export volumes under Processing Trade have increased tenfold. Additionally, it is worth noting that apart from direct export volumes, Entrepot Trade by Customs Special Control Area has also shown a significant increase since November. Excluding this growth, the total export volume would have seen an even greater decline.

       In conclusion, the market has essentially completed the transition in export trade modes. Currently, the mainstream export mode in the market is Processing with Imported Materials (CIF), with Southeast Asian countries remaining the primary destinations. Domestic enterprises still hold a certain level of positive expectations and plans for the future export market. Export volumes under Processing Trade may offset the decline in Ordinary Trade caused by the cancellation of tax rebates. For more insights into future export modes and the latest market developments, SMM will continue to provide updates.