【SMM Copper Cathode Rod Flash Update】Inventory side, affected by higher copper prices, enterprises became more cautious in raw material procurement, and raw material inventory pulled back; downstream pick-up pace was relatively slow, with enterprises basically balancing production and sales, and finished product inventories edging down slightly. Next week, the operating rate of copper cathode rod enterprises is expected to be stable with a slight decline, and SMM expects the operating rate to pull back MoM to 82.58%.

【SMM Copper Cathode Rod Flash】This week, the operating rate of copper cathode rod rose MoM to 83.58, while overall enterprise operations remained stable. Affected by the rebound in copper prices, the operating pace of downstream industries slowed somewhat; however, copper cathode rod enterprises maintained stable production on the back of earlier orders on hand, and order support was expected to continue until mid-April.

[SMM Copper Wire and Cable Weekly Operating Rate] This week, the operating rate of SMM copper wire and cable enterprises was 69.95, down 0.81 percentage points MoM. Overall operating performance was stable this week. During the week, copper prices hovered at highs, exacerbating wait-and-see sentiment among downstream enterprises, while new orders remained weak. Enterprises still relied on ample orders on hand to keep production basically stable. By segment, the power sector remained the core support, with orders in NEV and optical fiber performing well, while engineering and construction orders were still hardly optimistic. The operating rate of copper wire and cable enterprises is expected to fall 0.67 percentage points MoM to 69.29 next week

Refined Cobalt: This week, spot refined cobalt prices trended downward under the influence of capital flows and macro sentiment. Supply side, mainstream smelters kept ex-factory prices stable; after spot prices fell, traders' sentiment to hold prices firm strengthened, and spot-futures price spread quotations were raised to above parity. Demand side, lower spot prices improved downstream purchasing sentiment and slightly lifted transactions, but affected by fluctuations in related metals, downstream buyers remained cautious and mainly made just-in-time procurement. This week, the DRC announced an extension of cobalt intermediate product export quotas for Q4 2025, increasing export uncertainty; the structurally tight raw material situation in China remained unresolved, providing bottom support for cobalt prices. Cobalt Intermediate Products: This week, cobalt intermediate product prices edged up. The DRC announced its quota extension policy, under which Q4 2025 quotas can be extended by up to one month, and Q1 2026 quotas can be extended to the end of June; it is understood that the core reason for the current slow approval process for intermediate products is the lack of local detection personnel. Supply side, some miners sold small volumes of futures cobalt intermediate products this week, with quotations above $25.9/lb. Demand side, most smelters remained on the sidelines as cobalt salt prices struggled to catch up and available-for-sale intermediate products were scarce, and actual transactions were sluggish. Overall, based on the current pace of shipments, large-volume arrivals of cobalt intermediate products at port may be delayed to June-July. After downstream orders become clear and procurement demand is released, intermediate product prices will still have upside room. Going forward, continued attention should be paid to export progress in the DRC and the pace of downstream demand recovery. Cobalt Sulphate: This week, the spot market for cobalt sulphate operated steadily, with no significant price fluctuations, and overall continued to move sideways within a narrow range. Supply side, the continued tightness in raw materials supported smelter quotations, with the mainstream quotation range stable at 95,000-98,000 yuan/mt. At the beginning of the week, a small number of enterprises made low-priced shipments at 91,000-95,000 yuan/mt due to financial reporting and funding pressure, but these enterprises have now basically completed cash realization. Demand remained mediocre, as downstream enterprises were still cautious about expectations for subsequent orders, and their own raw material inventory remained ample, resulting in low purchasing enthusiasm. They only purchased small volumes of low-priced cargoes as needed, and overall market trading activity was weak. In the short term, the market remained in an inventory digestion cycle, with buyers and sellers in a stalemate, making large price swings unlikely. In the long term, uncertainty over raw material supply from the DRC will still support the cost side. As downstream inventories are effectively depleted, cobalt sulphate prices are expected to gradually rebound and recover.

Today, the most-traded BC copper 2605 contract opened at 85,360 yuan/mt. After the opening, its center moved higher to a high of 85,910 yuan/mt, then fell to a low of 84,530 yuan/mt, and finally closed at 84,820 yuan/mt, down 0.84%. Open interest reached 6,442 lots, up 237 lots from the previous trading day, while trading volume reached 4,508 lots, up 219 lots from the previous trading day. On the macro front, market sentiment was affected by Trump's remarks on the US-Iran issue, with risk appetite weakening and expectations for a swift end to the Middle East conflict cooling, which was bearish for copper prices. Fundamentals, on the supply side, imported cargoes have continued to arrive recently, and overall spot circulation remained relatively ample. On the demand side, downstream enterprises still showed limited acceptance of current price levels, with just-in-time procurement remaining the main approach overall. Inventory, as of Thursday, April 2, SMM copper inventories in major regions across China fell 14.04% WoW from last Thursday, while total inventory increased 53,800 mt YoY and has posted destocking for three consecutive weeks. The SHFE copper 2605 contract closed at 95,880 yuan/mt. Based on the BC copper 2605 contract price of 84,820 yuan/mt, its after-tax price was 95,847 yuan/mt. The price spread between the SHFE copper 2605 contract and BC copper was 33 yuan/mt, showing a contango structure.

London-based mining services provider NorgeMineraler said that the closure of the Strait of Hormuz would directly affect Europe’s ability to build up its military strength, especially if supplies of critical minerals were disrupted. NorgeMineraler founder Michael Wurmser noted that sulfur was of particular concern because the Gulf region supplied 25% of the world’s sulfur. Enterprises in the region produce sulfur as a by-product of crude oil refining. Sulfur is used to extract copper and cobalt, both of which are minerals essential for scaling up and maintaining military hardware production.