SMM August 13 At 11:30 today, the futures closing price was 108,300 yuan/mt, down 380 yuan/mt from the previous trading day. The average spot premium was 145 yuan/mt, down 140 yuan/mt from the previous trading day. Today, copper scrap prices remained unchanged day-on-day. The copper scrap sales sentiment index was flat at 2.712, and the purchase sentiment index was flat at 1.83. The price difference between copper cathode and copper scrap was 4,596 yuan/mt, down 281 yuan/mt day-on-day. The price difference between copper cathode rod and secondary copper rod was 1,670 yuan/mt. According to the SMM survey, the front-month futures contract neared delivery, and the price spread between futures contracts widened to 800 yuan/mt. Although scrap utilization enterprises shifted their pricing to the September contract, given the clear downtrend in forward contracts, their purchase willingness was mediocre. Meanwhile, suppliers' offers for copper scrap were unchanged from yesterday, and overall market transactions were mediocre.

SMM Morning Meeting Minutes: Overnight, LME copper opened at $14,230/mt, drifted higher early in the session to touch a high of $14,262/mt, then the copper price center shifted straight down, dipping to $14,096.5/mt near the end of the session, and finally closed at $14,109.5/mt, down 0.31%. Trading volume reached 16,900 lots, while open interest reached 263,000 lots, up 1,892 lots from the previous trading day, reflecting an increase in short positions. Overnight, the most-traded SHFE copper 2609 contract opened at 108,610 yuan/mt, immediately touched a high of 109,730 yuan/mt early in the session, then the copper price center drifted lower, dipping to 107,730 yuan/mt near the end of the session, and finally closed at 107,780 yuan/mt, down 0.36%. Trading volume reached 34,000 lots, while open interest reached 212,000 lots, down 2,364 lots from the previous trading day, reflecting a decrease in long positions.

SMM August 12 At 11:30 today, the futures closing price was 108,680 yuan/mt, up 60 yuan/mt from the previous trading day. The average spot premiums were -5 yuan/mt, down 65 yuan/mt from the previous trading day. Today, the copper scrap price rose 100 yuan/mt from the previous trading day. The copper scrap sales sentiment index fell to 2.72, and the purchasing sentiment index fell to 1.83. The price difference between copper cathode and copper scrap was 5,116 yuan/mt, down 118 yuan/mt from the previous trading day. The price difference between copper cathode rod and secondary copper rod was 2,000 yuan/mt. According to the SMM survey, tax-included supply became increasingly tight. According to feedback from copper scrap traders, the invoice tax rate for copper scrap has reached 12%. The increase in invoice costs has forced more and more scrap utilization enterprises to lower the copper scrap price. Therefore, the price difference between copper cathode and copper scrap has been widening recently, with the rising invoice cost being one of the main reasons.

SMM August 11 At 11:30 today, the futures closing price was 108,620 yuan/mt, up 850 yuan/mt from the previous trading day. The average spot premium was 60 yuan/mt, down 20 yuan/mt MoM from the previous trading day. The price of copper scrap remained flat MoM. The copper scrap sales sentiment index rose to 2.77, while the purchase sentiment index fell to 1.86. The price spread between copper cathode and copper scrap was 5,234 yuan/mt, up 830 yuan/mt MoM. The price difference between copper cathode rod and secondary copper rod was 2,080 yuan/mt. According to the SMM survey, copper prices shot up again, and scrap utilization enterprises have been continuously purchasing copper scrap from the market in the past two weeks, resulting in ample raw material inventory. Given the current high copper prices, their purchase willingness was very weak.

[SMM Analysis: U.S. Restricts Critical Mineral Scrap Exports — Could Copper Scrap Be Next?]The U.S. has imposed a 100% domestic sales requirement on black mass and tungsten scrap, signaling tighter control over strategic secondary resources. Copper scrap is not yet included, but SMM expects more high-grade scrap to stay in the U.S. as local processing capacity expands, tightening global supply and supporting high scrap coefficients.

SMM Morning Meeting Minutes: Overnight, LME copper opened at $14,122.5/mt, drifted lower in early trading to touch a low of $14,069/mt, then the price center gradually moved up to test $14,177/mt, and subsequently drifted lower again to close at $14,120/mt, up 0.7%, with trading volume of 15,000 lots and open interest of 259,000 lots, an increase of 1,164 lots from the previous session, represented by bulls adding positions. Overnight, the most-traded SHFE copper 2609 contract opened at 107,850 yuan/mt, drifted lower in early trading to test 107,450 yuan/mt, then the price center moved up sharply to touch 108,060 yuan/mt, and finally closed at 107,790 yuan/mt, up 0.16%, with trading volume of 27,400 lots and open interest of 212,000 lots, a decrease of 2,287 lots from the previous session, represented by bears reducing positions.

【SMM Copper Scrap Flash】 The price difference between primary metal and scrap has historically been the "thermometer" for the secondary copper industry, and its widening typically effectively boosts copper scrap consumption. According to SMM, after end-June 2026, copper prices rose, and the price spread between primary metal and scrap expanded from less than 1,000 yuan/mt to around 4,400 yuan/mt, at a historically relatively high level. However, copper scrap consumption did not show a synchronized strong uptrend, and the indicator showed a "divergence," mainly disrupted by tax compliance factors: First, after the implementation of reverse invoicing, the circulation of uninvoiced copper scrap was hindered. The number of compliant individual accounts is limited, and the additional compliance cost is difficult to pass on downstream. Scrap utilization enterprises can only pass the pressure upstream by lowering the purchase price of copper scrap. Second, the supply of domestically produced, tax-inclusive copper scrap is scarce, and enterprises scramble for input VAT invoices. The invoice tax rate rose from 10.5% to 11.5%-12%, while the finished secondary copper rod sector faced fierce competition and could not raise prices, prompting enterprises to further depress raw material purchase prices. In summary, the rapid expansion of the price difference between primary metal and scrap in this round was not driven by demand; rather, it resulted from tax costs being passed upstream along the industry chain to the copper scrap side.

SMM August 10 At 11:30 today, the futures closing price was 107,770 yuan/mt, down 630 yuan/mt from the previous trading day, and the average spot premiums were 80 yuan/mt, up 10 yuan/mt DoD. The copper scrap price fell 300 yuan/mt DoD, with the copper scrap sales sentiment index falling to 2.71 and the purchasing sentiment index to 1.96. The price difference between copper cathode and copper scrap was 4,404 yuan/mt, down 281 yuan/mt DoD. The price difference between copper cathode rod and secondary copper rod was 1,650 yuan/mt. According to the SMM survey, under earlier arbitrage trading, downstream scrap utilization enterprises had allocated considerable funds to raw material procurement and futures. As copper prices pulled back after a short-term peak, scrap utilization enterprises awaited opportunities to take profits on futures, and they did not take action in spot procurement during the initial stage of the copper price pullback. Meanwhile, copper scrap suppliers were eager to offload their high-priced inventories, and intraday transactions showed mediocre performance.

SMM Morning Meeting Minutes: Last Friday night, LME copper opened at $14,141/mt. At the beginning of the session, it swung wildly and hit a high of $14,173/mt. Then the center of copper prices shifted straight downward, dipping to $14,006/mt near the end of the session, and finally settled at $14,022/mt, down 0.5%. Trading volume reached 19,800 lots, and open interest stood at 258,000 lots, up 3,254 lots from the previous trading day, indicating an increase by bears. Last Friday night, the most-traded SHFE copper 2609 contract opened at 108,010 yuan/mt. It immediately rose to 108,140 yuan/mt at the beginning, then the center of copper prices consolidated lower, dipping to 107,130 yuan/mt near the end, and finally settled at 107,160 yuan/mt, down 0.8%. Trading volume reached 45,000 lots, and open interest stood at 215,000 lots, down 6,056 lots from the previous trading day, indicating a reduction by bulls.

In July 2026, the operating rate of secondary copper rod was 12.43%, lower than the expected 12.61%, down 0.18 percentage points MoM and 18.47 percentage points YoY. In July 2026, the copper scrap rod market operated under the dominant theme of the most-traded SHFE copper contract shooting up from 102,000 yuan/mt to above 106,000 yuan/mt, with a monthly gain exceeding 3,000 yuan/mt. Driven by the one-sided rally of copper cathode and insufficient follow-through from copper scrap, the price difference between primary metal and scrap widened from around 2,000 yuan/mt at the start of the month to over 4,000 yuan/mt at month-end, and at one point mid-month it even reached 4,800 yuan/mt. The price difference between copper cathode rod and secondary copper rod also hit the economic threshold of above 1,800 yuan/mt during the copper price surge. Under the dual framework of continued reverse invoicing compliance constraints and deepening high-temperature off-season, the market displayed a distinct polarization: structural tightness in supply, robust downstream arbitrage-driven purchases, and an off-season that was even weaker for physical consumption. Starting July 1, the new "three-in-one reverse invoicing" policy (with the prepayment rate of individual income tax for natural persons with annual sales of up to 600,000 yuan reduced to 0.25%) was formally implemented, further reshaping the regional supply landscape. On the supply side, the copper scrap market continued the structural tightness seen since 2026, with the underlying constraint still being the combined impact of the reverse invoicing policy and the phase-out of fiscal and tax subsidies: inspections in Hubei and other regions became stricter, and invoicing quotas in areas such as Shuyang, Jiangsu remained restricted. More critically, in July, Henan province abolished fiscal and tax subsidies while reverse invoicing could still be implemented. In Shuyang, Jiangsu, following the reverse invoicing controls, companies were notified in July of the cancellation of subsidies, and most scrap utilization enterprises had suspended operations to wait and see. Some unfulfilled orders from Jiangsu flowed to neighboring provinces, and available compliant and deductible copper scrap remained tight. Mainstream copper scrap invoice tax rates had exceeded 11%, rising to 12% in some areas, further driving up raw material procurement costs for enterprises. On the demand side, as the price difference between primary metal and scrap widened to above 3,800 yuan/mt, the economic viability of copper scrap became evident, and secondary copper rod enterprises' purchase willingness was remarkably robust. However, this robust purchase willingness was mainly directed at futures arbitrage rather than physical restocking. During the copper price surge, secondary copper rod enterprises widely adopted a hedging logic of "buy raw materials and sell futures" to purchase copper scrap. After securing enough for the day's demand during the morning session, they stopped quoting and did not chase higher prices to accept goods. However, such arbitrage-driven purchases initially did not fully translate into actual production restocking. The end-user wire and cable and enamelled wire industries were squeezed by the dual pressures of low copper cathode inventories with high premiums and high absolute copper prices, with pervasive fear of high prices. New orders became even weaker in the off-season. At month-end, secondary copper rod enterprises’ raw material inventory had reached a relatively ample level after mid-month hedging purchases, and the purchasing sentiment index dropped from 2.21 to a low of 2.03. The core market contradiction shifted from "spread dividend goes to arbitrage" to "ample inventory suppressing transactions." Overall, the core contradiction in the secondary copper rod market in July shifted from "copper price level" to "who gets the spread dividend" and "where compliant supply is located" — the price difference between primary metal and scrap of around 4,000 yuan/mt brought by the copper price surge was essentially captured by arbitrage funds; secondary copper rod enterprises’ operations of buying raw materials and shorting futures supported the circulation of copper scrap, but this was not transmitted to physical consumption. The cancellation of subsidies in Henan, Shuyang in Jiangsu, and other regions triggered a regional supply restructuring, further concentrating compliant cargoes in areas with a relatively stable policy environment. The outflow of orders from Jiangsu to neighboring provinces is a direct reflection of this restructuring. Looking ahead to August, if the price difference between primary metal and scrap can stabilize above 4,000 yuan/mt, the implementation standards for reverse invoicing become clearer, and quotas in some regions are marginally relaxed, this may drive some restocking demand. Otherwise, amid a combination of low copper cathode inventory, high premiums, and downstream users’ fear of high prices, the secondary copper rod market will continue with a weak equilibrium pattern of "suppliers sell when copper prices rise, rod enterprises hedge and buy, but both sides wait and see when prices are high." A genuine recovery in physical consumption will still need to wait for a correction in copper prices or a material improvement in end-user orders.