[SMM Analysis: Price Spread Between Copper Cathode and Copper Scrap Widens by Over 2,000 Yuan, Driving Dominance of Hedging-Based Procurement] This week (July 13 – July 16), the copper scrap market operated under a triple framework of retreat after rapid rise in copper prices, ongoing compliance constraints from reverse invoicing, and intensifying high-temperature off-season. The most-traded SHFE copper contract surged to 105,020 yuan/mt mid-week, gaining nearly 2,000 yuan/mt for the full week compared to the start of the week. However, copper scrap was supported by compliance costs and suppliers holding prices firm, with full-week price fluctuations of less than 1,000 yuan/mt. The price spread between copper cathode and copper scrap widened from 2,445 yuan/mt at the start of the week to 3,923 yuan/mt, a WoW increase of over 2,200 yuan/mt, entirely driven by the unilateral rise in copper cathode prices. The resilience of copper scrap itself was the key supply-side feature this week, which directly gave rise to hedging-based procurement demand from secondary copper rod enterprises.....

SMM copper wire and cable enterprise inventory this week, affected by high copper prices and the price spread between futures contracts, wire and cable enterprises' willingness to stockpile raw materials remained sluggish, with raw material inventories falling 3.13% MoM. The rise in copper prices stimulated downstream end-users to rush to pick up goods amid the price rise, leading end-users to concentrate on consuming their existing finished product inventories, which fell 1.89% MoM.

Non-oriented Silicon Steel Price Dynamics Shanghai B50A800 Grade: 4,380-4,380 yuan/mt Guangzhou B50A800 Grade: 4,200-4,200 yuan/mt Wuhan 50WW800 Grade: 4,280-4,280 yuan/mt Shanghai market: This week, spot prices of cold-rolled non-oriented silicon steel in Shanghai were in the doldrums, and overall transaction performance remained sluggish. Market feedback indicated that the market was currently in the demand off-season, and downstream motor enterprises’ purchase willingness was weak. Although leading steel mills raised the base price of non-oriented silicon steel by 50 yuan/mt, transaction improvement remained unapparent. Most traders only maintained routine inventory levels, with low willingness to stockpile, and held a cautious wait-and-see sentiment overall. Overall, spot prices of cold-rolled non-oriented silicon steel in Shanghai are expected to stay in the doldrums next week. Guangzhou market: This week, the cold-rolled non-oriented silicon steel market in Guangzhou was in the doldrums, with mediocre transaction performance. Market feedback indicated that traders’ spot quotes were weak and stable, and there was room for negotiation in actual transactions. Downstream purchasers showed weak willingness to purchase, and overall market trading atmosphere was mediocre. Steel mills raised the base price of non-oriented silicon steel by 50 yuan/mt, but market acceptance was limited, and prices of mid- and low-grade products did not follow with noticeable adjustments yet. Overall, spot prices of cold-rolled non-oriented silicon steel in Guangzhou are expected to remain in the doldrums next week. Wuhan market: This week, the cold-rolled non-oriented silicon steel market in Wuhan trended weakly, with poor transaction performance. Market feedback indicated that demand remained persistently weak; downstream motor enterprises’ purchase willingness was weak, and they mostly adopted small-batch, batch-by-batch just-in-time procurement. Insufficient demand support led spot prices to edge down, and a strong wait-and-see atmosphere prevailed in the market. Overall, spot prices of cold-rolled non-oriented silicon steel in Wuhan are expected to remain in the doldrums next week. Data Source Statement: (Data other than public information in this report are all from public information (including but not limited to industry news, seminars, exhibitions, corporate financial reports, broker reports, National Bureau of Statistics (NBS) data, customs import and export data, various data published by major associations and institutions, etc.), market communication, and based on SMM’s internal database models, comprehensively analyzed and reasonably inferred by the research team, for reference only and do not constitute decision-making advice. Shanghai Metals Market (SMM) reserves the final interpretation right of this statement and the right to adjust and modify the statement content according to actual circumstances.

This week (July 10–July 16) the SMM copper wire and cable enterprise operating rate recorded 68.96%, down 1.88 percentage points WoW and down 3.94 percentage points YoY. Industry production loads continued to weaken. During the week, copper prices kept climbing, suppressing downstream willingness to sign new orders. Coupled with the traditional consumption off-season, overall end-use demand was weak, and market order performance was generally mediocre. Demand across sub-sectors mostly lacked highlights, with only State Grid orders being released steadily. Rising copper prices drove some end-users to place rush-buy replenishment retail orders, providing bottom support for this week’s operating rate. On the inventory side, affected by high copper prices and the futures monthly spread structure, wire and cable enterprises’ willingness to stockpile raw materials remained subdued, with raw material inventories down 3.13% WoW. Rising copper prices prompted downstream end-users to pick up goods in phases to chase prices; end-users concentrated on consuming on-hand finished product supplies, sending finished product inventories down 1.89% WoW. Looking ahead to next week, the traditional demand off-season is not yet over, and the end-use market shows no signs of recovery. SMM expects next week (July 10–July 16) the copper wire and cable operating rate will continue to decline by 1.56 percentage points WoW to 67.4%, and by 3.43 percentage points YoY.

Today, the trading atmosphere in the central China market continued to rebound compared to the previous two days. Coinciding with Friday, stockpiling demand from downstream processing enterprises was somewhat released, and the stockpiling sentiment among trading firms engaging in both spot and futures market remained strong, providing strong support to market prices. Moreover, suppliers showed a notable willingness to hold prices firm and hold back from selling. As a result, the actual transaction price range in the central China market was at a premium of -110 to -140 yuan/mt against the SHFE aluminum August contract, with a trend of continuously moving higher.

[SMM Analysis: Surge in Copper Prices Drives Widening Price Difference Between Copper Cathode and Copper Scrap; Supply Side Holds Prices Firm Amidst Declines + Arbitrage-Driven Purchases Dominate Transactions] The most-traded SHFE copper contract surged to 105,020 yuan/mt mid-week, rising nearly 2,000 yuan/mt from the beginning of the week. However, as copper scrap was supported by compliance costs and suppliers held prices firm, resisting declines, its price fluctuated by less than 1,000 yuan/mt throughout the week. Consequently, the price difference between copper cathode and copper scrap widened consistently from 2,445 yuan/mt at the start of the week to 3,923 yuan/mt, a WoW increase of over 2,200 yuan/mt. This widening spread was entirely driven by the isolated rise in copper cathode prices. The inherent resilience of copper scrap against price declines was the core feature on the supply side this week......