Rising Copper Prices Suppress Demand, Operating Rates Fall Short of Expectations [SMM Enamelled Wire Market Weekly Review]

[SMM Shanghai Spot Copper] Looking ahead to next week, intraday SHFE copper prices declined, and downstream orders saw a slight increase in volume. However, the current copper prices remain less attractive to end-users, with the volume increase being insignificant as the high-price suppression effect persists. According to SMM, end-user enterprises mostly placed orders around 102,000-103,000 yuan/mt. Some downstream enterprises have opted to shut down furnaces for maintenance due to high copper prices, reflecting the notable suppression of actual demand at current price levels. After the contract rollover, the market will officially price around the 2606 contract, and close attention should be paid to the outflow of unmatched warrants. However, the current open interest of the SHFE copper 2605 contract stands at only 4,775 lots, with limited participation in delivery, so the concentrated release of warrants is expected to have relatively limited further pressure on spot discounts. Supported by delivery logic, Shanghai spot copper discounts did not see a significant decline. However, if copper prices remain at current highs, the demand side will struggle to improve effectively, and spot discounts may come under pressure. Overall, Shanghai spot copper prices against the 2606 contract are expected to remain at a discount next week.

[SMM Analysis: High Copper Prices Led to Slow Shipments and Sluggish Raw Material Consumption at Secondary Copper Rod Enterprises] According to SMM data, the operating rate of secondary copper rod was 6.84% this week, up 0.08 percentage points WoW and down 15.03 percentage points YoY. Meanwhile, the average price difference between copper cathode rod and secondary copper rod was 1,914 yuan/mt, widening by 549 yuan/mt WoW. In addition, the average discount of secondary copper rod in Jiangxi against copper futures was 1,518 yuan/mt, widening by 773 yuan/mt WoW. Based on SMM's secondary copper rod gross profit model, the average gross profit during the week was 857 yuan/mt, an increase of 477 yuan/mt......

Appian Capital Advisory acquired a 95% controlling interest in the Omitiomire copper project in Namibia. The project is expected to require approximately $400 million in development funding, with a mine life of 15 years and annual production of approximately 300,000 mt of copper. The company plans to switch the process from leaching to flotation and has initiated negotiations on future offtake arrangements. Appian stated that against the backdrop of constrained new supply, the project represents a rare near-term opportunity to bring new production to market. Technical due diligence has identified multiple value creation pathways, and the project will be advanced in a responsible and efficient manner.