SMM

SMM March 14 News: According to SMM's survey data, the operating rate of secondary copper rod this week was 28.37%, down 2.51 percentage points WoW and 25.81 percentage points YoY. Meanwhile, the average price difference between copper cathode rod and secondary copper rod this week was 1,762 yuan/mt, up 359 yuan/mt MoM. Additionally, the average discount of secondary copper rod in Jiangxi against copper futures was 1,288 yuan/mt, expanding by 435 yuan/mt MoM. Despite the continuous expansion of the price difference between copper cathode rod and secondary copper rod, which remained above the advantageous line due to the impact of copper prices, the consumption of secondary copper rod did not increase; instead, the operating rate declined. The main reasons for this are the weak consumption from end-user wire and cable enterprises and the high copper prices, leading wire and cable enterprises to mainly make just-in-time procurement. Some secondary copper rod enterprises reported that recent cargo pick-up was mainly by traders, but due to the high price and limited procurement volume of secondary copper raw material, secondary copper rod enterprises had to stockpile sufficient raw materials before starting production, resulting in factories being unable to produce continuously. In the context of rising copper prices this week, both the shipments of secondary copper rod enterprises and traders decreased, with traders slowing down their cargo pick-up, causing the finished product inventories of secondary copper rod enterprises to increase from 3,960 mt last week to 5,150 mt. In summary, the tight supply and high price of secondary copper raw material, coupled with the slower cargo pick-up speed from end-users and traders, led to a slight decline in the operating rate of secondary copper rod enterprises. Enterprises with anode plate capacity have shifted to producing anode plates, as the discount of secondary copper rod against copper futures this week was 1,288 yuan/mt, while the discount for anode plates was 600-700 yuan/mt, attracting secondary copper rod enterprises to switch to producing anode plates due to higher selling prices. Looking ahead to next week, many secondary copper rod enterprises have accumulated a considerable number of pending orders. If copper prices pull back next week, secondary copper rod enterprises will actively deliver goods, and the operating rate is expected to rebound to 33.93%.