According to customs data, lead concentrate imports in February 2026 were 124,580 mt in physical content, up 3.8% MoM and up 26.4% YoY; cumulative imports in January-February reached 252,241 mt in physical content, up 14% YoY on a cumulative basis. Over the same period, silver concentrate imports were about 148,600 mt in physical content, down 17% MoM and down 8% YoY; cumulative imports in January-February were 328,600 mt in physical content, down 1.27% YoY on a cumulative basis.

As of March 9, SMM recorded total social inventory of copper cathode in major regions of China at 578,900 mt, up 1,700 mt from last week and up 70,400 mt from February 24, reaching a historical high. Over the same period, spot premiums for SMM #1 copper cathode gradually recovered from premium -260 yuan/mt on February 27 to parity on March 10. Overall, this upswing in spot premiums was mainly driven by the approach of delivery, under which the contango price spread between nearby and next-month contracts stayed around 300 yuan/mt; suppliers held prices firm and withheld sales, while about half of the material was converted into warrants and locked in, jointly tightening circulating supply. Observing the inventory accumulation pace, from the week of March 2 to March 9, inventories in three key regions increased by 14,400 tons, a growth of 2.65%. This marks a significant slowdown compared to the average weekly increase of approximately 45,000 tons during the period from February 5 to February 26. The deceleration in inventory buildup provided room for improvement in premiums. Current inventory accumulation primarily stems from two factors: First, the continued arrival of imported copper. According to SMM research, a substantial volume of imported copper continues to arrive recently, and it is expected that arrivals will not see a significant decline in March. The steady inflow of imported materials provides a continuous supply supplement to the domestic market and is a crucial support for maintaining high total inventory levels. The actual situation of imported arrivals in April remains to be confirmed, requiring close attention to customs data at month-end and changes in port clearance pace. Second, some cargoes are being delivered into bonded/warehouse warrant stocks. According to the electrolytic copper spot purchasing and selling sentiment indices for the Shanghai region recorded by SMM, the purchasing sentiment index rose from 2.08 on February 24 to 2.78 on March 10, while the selling sentiment index increased from 2.09 to 2.90 over the same period. Some downstream players have limited acceptance of current copper prices, maintaining a procurement strategy focused on immediate needs, resulting in selling sentiment slightly outpacing purchasing sentiment. Based on SMM's communications with enterprises: Upstream Producer 1: Recent consumption is relatively good, with daily sales around 2,000 tons. Upstream Producer 2: Currently produced electrolytic copper is primarily for export. Domestic inventories are low, so there's no rush to sell. Unwilling to sell when discounts are excessive. Trader 1: Quotations in the Changzhou market are higher than in Shanghai, mainly because locally available circulating cargoes are mostly warrants. Under the current spread structure, holders have high flexibility in selling – they can choose to sell or hold. Trader 2: The market is not short of supply; there are still a large number of warrants in warehouses awaiting digestion. However, due to the delivery mechanism, the incentive to sell depends on the premium level. Only when the premium exceeds the cost of capital will there be a strong willingness to liquidate. Downstream User 1: Recent orders are relatively robust. When copper prices fell on March 9, we already replenished inventories at the low point. Current raw material inventory can sustain operations until March 15. There are no immediate plans for further procurement; subsequent needs will primarily be met through long-term contract drawdowns. Downstream User 2: The recent spot premium has been quite firm, mainly due to the spread between months. Without such a high monthly spread, the premium would definitely not reach this level. In summary, this round of recovery in spot premiums is driven by multiple factors: First, the approach of delivery and the widening monthly spread strengthened holders' willingness to support prices. With delivery approaching, the Contango spread between months remains around 300 yuan/ton. Holders are underpinning prices, reluctant to sell, and strongly inclined to deliver stocks into warrants. Second, the inventory structure further amplified the tightness of available circulating supply. Taking Jiangsu as an example, out of 118,000 tons of social inventory, 94,000 tons were futures warrants. This portion is locked in delivery warehouses, making it difficult to form effective supply in the short term, leading to a phase of relative tightness in spot market circulating cargoes. According to SMM, some downstream companies in Jiangsu struggled to source materials in the market and opted to procure using the SMM Flat Copper Price average as a benchmark with minor adjustments. Third, the comprehensive resumption of work by downstream enterprises released procurement demand. After the Lantern Festival, downstream processing enterprises in Jiangsu, Zhejiang, and Shanghai entered a full resumption phase. Surveys indicate that companies in the battery materials sector maintain high operating rates. Copper foil processors reported that downstream battery manufacturers sustain high operating rates, with March production schedules already showing characteristics of the peak season. Copper tube companies, supported by peak season stocking from the air conditioning industry, have operating rates exceeding pre-holiday levels. Although the recovery pace in the wire & cable and copper rod sectors is relatively slow, overall procurement demand has significantly improved compared to the first week after the holiday. Fourth, the decline in copper prices activated downstream restocking intentions. Recently, Shanghai copper futures prices retreated somewhat, stimulating downstream enterprises to purchase at dips. Previously suppressed by high copper prices, downstream players mostly maintained a cautious just-in-time procurement strategy, resulting in generally low raw material inventory levels. After the price pullback, some companies took the opportunity to replenish stocks, boosting spot transaction activity.

Following the Chinese New Year holiday, the electrolytic copper market has entered its traditional post-holiday resumption validation period. The Yangtze River Delta region, as the national core for copper processing and consumption, serves as a bellwether for assessing supply-demand dynamics through the operating rates and raw material procurement pace of its leading enterprises. Our survey indicates that the region is currently characterized by "excessively high inventory accumulation, a divergence in resumption rates, and cautiously recovering procurement sentiment," leading to a downward revision of market expectations for the start of the peak season in March. According to SMM research, as of February 26, 2026, social inventories of electrolytic copper stood at 531,700 metric tons, an increase of 178,100 metric tons from February 12. This pace of inventory buildup significantly exceeds levels seen in previous years. The Yangtze River Delta region contributed the bulk of this increase: inventories in Shanghai rose to 305,800 metric tons, while Jiangsu Province reached 93,100 metric tons, up by 97,500 metric tons and 45,200 metric tons respectively from February 12. This round of inventory accumulation is characterized as "passive delivery into warehouses." As the first trading day after the holiday (February 25) coincided with the last trading day for the SHFE 2602 contract, smelters concentrated their deliverable cargoes into exchange-designated warehouses just before the holiday. This led to an increase of 80,400 metric tons in SHFE copper warrants, bringing the total to 277,100 metric tons, a portion temporarily locked in the form of warrants. Concurrently, with the narrowing of import losses and the emergence of a profit window before the holiday, arrivals of imported copper in March are expected to increase, putting dual pressure on domestic social inventories from both domestic production and imported supply. Based on operational feedback from enterprises, downstream processing sectors in the Yangtze River Delta exhibit significant contrasting dynamics: The battery materials sector maintains robust performance. Copper foil producers either had short production stoppages or operated continuously during the holiday. Downstream battery manufacturers are running at high utilization rates, with some reporting that their March production schedules already display peak-season characteristics. This sustains rigid demand for purchasing electrolytic copper. In contrast, the resumption of operations in the traditional cable and copper processing sectors is sluggish. Performance in traditional copper-consuming segments like wire and cable, copper rod, and copper tube is relatively weak. In the first week after the holiday, leading cable companies saw a decline in new orders. Apart from high copper prices dampening downstream acceptance, the fact that end-user projects have not yet fully commenced is a major constraint. According to enterprise feedback, construction and infrastructure projects typically resume gradually after the Lantern Festival (which falls after the standard holiday), and the market is currently in a lull for new orders. Copper rod processors generally have high finished goods inventory, and some orders from before the holiday are still pending delivery. Consequently, their procurement of electrolytic copper primarily focuses on consuming existing inventory and making ad-hoc spot purchases based on immediate needs, showing a weak willingness to stock up on raw materials. Overall, downstream consumption in the region currently presents a pattern of rigid demand from the battery sector versus pending demand from the cable sector. The transmission of genuine end-user consumption to the electrolytic copper procurement stage will still require time. According to information obtained by SMM through communication with enterprises: Enterprise 1: Normal operations resumed on the 6th day of the first lunar month. The downstream battery industry is operating at a high utilization rate; current copper foil production has increased from 20% to approximately 50% compared to previous levels. However, the wire and cable sector has seen relatively few new orders recently. The main reasons are persistently high copper prices, and, consistent with previous years, end-user projects typically do not fully commence until after the Lantern Festival, leading to a temporary lag in demand transmission. Enterprise 2: The company reached full production capacity immediately after resuming work on the 6th day of the first lunar month, requiring approximately 1,000 tons of electrolytic copper daily. Raw material inventory is maintained at a reasonable level, adopting a cautious procurement strategy of daily spot purchases. However, finished goods inventory is higher than before the holiday, with some pre-holiday orders still pending delivery. Regarding downstream orders, pre-holiday withdrawals were relatively concentrated, while the performance of new orders after the holiday is weak, as some downstream customers have yet to restart operations. Enterprise 3: Production workshops ran continuously during the Chinese New Year. Recently, production has remained stable, with orders from key clients holding steady. Raw material inventory is kept at a low level, and electrolytic copper purchases are made based on order volume. However, the volume of recent spot purchases has decreased compared to the previous period. Enterprise 4: Recently, there has been a decrease in new downstream orders, resulting in sluggish market transactions. Pressure from finished goods inventory is not significant, but some pre-holiday orders are still awaiting delivery. Raw material inventory is maintained within a normal and manageable range. On February 24, the Purchasing Sentiment Index recorded 2.08, remaining in a weak range, indicating low enthusiasm among downstream companies for market inquiries in the first week after the holiday. Subsequently, it recovered day by day to 2.58 on February 26. Over the same period, the Shipment Sentiment Index rose from 2.09 on February 24 to 2.80 on February 26, showing a continuous upward trend and consistently remaining higher than the Purchasing Sentiment Index. H istorical data can be queried in the database. This reflects that, as the resumption of work progresses, some rigid demand has begun to emerge, with certain downstream companies entering the market for inquiries. However, the absolute levels remain low, indicating limited acceptance of current copper prices among downstream users. Their stocking strategy remains predominantly "hand-to-mouth procurement." Holders, under pressure from high inventories, exhibit a strong willingness to liquidate, while market transactions are primarily circulating within the trading sphere, with genuine downstream offtake yet to pick up significantly. Looking ahead, the unexpected inventory accumulation has already triggered a market correction to previous supply-demand expectations. In the short term, social inventories in the Yangtze River Delta region still face pressures from two fronts: first, the arrival of imported copper resources, and second, the need for time to digest high downstream finished goods inventories. Channels for inventory outflow are also obstructed, with LME inventories continuing to climb and maintaining a Contango structure, making it difficult to absorb the domestic surplus. A positive factor on the supply side lies in the concentrated maintenance window for domestic smelters during March-May in the first half of the year, with substantial impacts expected to emerge starting in April. If demand-side support materializes by then, an inventory drawdown cycle could potentially commence between late March and April. However, due to the exceptionally high post-holiday inventory starting point, even entering a destocking phase is unlikely to replicate the high BACK structure and high premiums seen during the same periods in previous years. Overall, the post-holiday resumption in the Yangtze River Delta region is characterized by high inventory levels, cautious procurement, and pending orders. The market is now awaiting the substantive return of end-user orders after the Lantern Festival. The short-term price-driving logic may shift from validation of "expected destocking" to "actual destocking."

This week (January 30-February 5), the operating rate of SMM copper wire and cable enterprises was 60.15%, up 0.69 percentage points MoM. At the beginning of the week, when copper prices hit the lower limit, the overall pickup volume in the end-use industry showed improvement, and new orders also increased. Enterprises scheduled production based on orders, supporting stable subsequent production. Specifically, previously awarded State Grid orders continued to be implemented, and equipment cable orders grew concurrently, providing the main source of orders for the industry. It is worth noting that there are significant regional differences in the wire and cable industry. East China maintained a normal production pace, while North and South China experienced weaker overall demand due to early holidays at downstream enterprises. In terms of inventory, during the period of copper price correction, enterprises completed centralized restocking. However, affected by wild swings in copper prices, enterprises still maintained a cautious procurement strategy, mainly making just-in-time procurements in batches. This week, raw material inventory increased 1.83% MoM, reaching 13,355 mt; finished product inventories, however, decreased 2.05% MoM with the increase in orders, recording 17,720 mt. Looking ahead to next week, the increase in this week's orders will provide some support for next week's operations. However, as some enterprises will officially enter the Chinese New Year holiday later next week, SMM expects the operating rate of copper wire and cable enterprises to decrease 2.57 percentage points MoM to 57.57% (February 6-February 12).

[SMM Copper Express] Wire and cable enterprises mostly completed concentrated restocking during the copper price pullback this week. However, affected by wild swings in copper prices, enterprises maintained a cautious procurement strategy, generally adopting just-in-time procurement in batches. As a result, raw material inventory increased by 1.83% MoM. Finished product inventories decreased due to destocking as orders rose, down 2.05% MoM.

[SMM Magnesium Weekly Inventory Data] This week, social inventory increased by 4.41% compared to the previous week. Minor inventory accumulation was observed in major regions such as Tianjin and Shanxi, with both trader and factory stocks remaining at relatively high levels. However, persistently weak overseas orders have led traders to generally adopt a cautious, wait-and-see procurement strategy.

Currently, the overall prices in the rare earth market remain stable. Due to the lack of improvement in end-use demand, downstream magnetic material enterprises are experiencing average order-taking situations, with most companies adopting a just-in-time procurement strategy, and market inquiries are moderate. However, as metal prices have reached a low level, the actual trading volume has improved WoW. Supported by oxide prices, the metal market is unlikely to experience significant downward adjustments in the short term.

[SMM Rare Earth Daily Review: Just-in-Time Procurement Dominates, Rare Earth Prices Remain Stable] Currently, the overall price of the rare earth market remains stable. Due to the lack of improvement in end-use demand, the order-taking situation of downstream magnetic material enterprises is average. Most enterprises adopt a just-in-time procurement strategy, and market inquiries are also average. However, as metal prices have reached a low level, the actual trading volume has improved WoW. Influenced by the support of oxide prices, the metal market is unlikely to experience significant downward adjustments in the short term.

[SMM Weekly Review of Power Battery Cell Market] Currently, the fluctuations in battery cell prices are more driven by adjustments in the demand-side rhythm and the transmission of inventory pressure, rather than changes in the material side.

Second-life Batteries: From the perspective of overall data analysis, in June, the ESS sector was affected by the withdrawal of the mandatory energy storage allocation policy, resulting in weakened support for rigid demand. The auto sales boom driven by previous auto shows gradually faded, and the end-use market lacked consumption momentum. It is expected that there will be no significant growth in end-use demand. In terms of market transactions, the prices of Grade B products in the second-life battery market remained stable overall, with the market primarily adopting a wait-and-see attitude. On the supply side, the supply of second-life battery cells remained relatively abundant. On the demand side, there were no significant changes in downstream demand, and overall supply and demand remained basically unchanged. Currently, market transactions in June remain sluggish. Some second-life battery producers, based on expectations of future price declines, are maintaining a just-in-time procurement strategy.