[SMM Analysis：Rare Earth Scrap Recycling Slows as Tax Compliance Tightens, Impacting Production Rates]Recently, multiple rare earth scrap recycling enterprises reported that operating rates may decline in June-July. Large enterprises, with a higher proportion of self-procurement, are seeing more significant production reductions; small and medium-sized enterprises, relying less on self-procurement and more on processing orders, are relatively less affected.

[Weekly Review of Aluminum Scrap and Secondary Aluminum]High Raw Material Costs Keep Secondary Aluminum Prices Firm

In May, copper prices surged before retracing, yet copper scrap payability coefficients remained exceptionally firm. Transactions for Millberry stabilized at a high level of 98.5%, while No. 2 copper became the market highlight, with its coefficient climbing from around 95% to 96%–97% due to the premium upside of its gold and silver by-products. Driven by stricter domestic policies and tax compliance, China demand remained robust. Conversely, tight overseas scrap supply persisted, and this structural mismatch kept import payability coefficients elevated and sticky for the short term. Under the current landscape of tight global supply and resilient demand, the traditional market logic of "surging copper prices driving down payability coefficients" has effectively become obsolete.

In April 2026, China imported 211,700 mt in physical content of copper scrap and shredded copper scrap, down 6.96% MoM and up 3.41% YoY. Cumulative imports from January to April 2026 reached 839,600 mt in physical content, up 8.05% YoY on a cumulative basis. (HS code: 74040000)

Asian copper scrap supply is severely tight due to decline in the volume and quality of US exports due to recovering domestic consumption; depleted inventories from early-year copper price volatility; and China's tax compliance pressures restricting local scrap flows, which intensifies regional competition for imports. Boosted by bullish hoarding, pricing coefficients have defied expected corrections despite surging copper prices. Bare Bright Copper is currently converging around 98.5%, with No. 1 Copper at 97%-97.5%. Notably, No. 2 Copper coefficients have spiked "abnormally" to 95%-96%. This anomaly is primarily driven by high precious metal prices, as scrap batches rich in gold and silver impurities command high premiums, lifting the overall No. 2 Copper pricing benchmark.

Scrap tightening and a major nickel-cobalt producer's output cut pushed SHFE stainless steel to levels not seen since 2023 — yet physical demand remains conspicuously absent heading into the May Day break

The copper scrap market this week operated under the impetus of a strong macro-driven rally in copper prices. Futures and spot prices rose in tandem, but the intensifying divergence in sentiment and behavior between upstream and downstream participants along the industry chain lent the market a complex character best described as "price-driven transactions amid an unchanged weak supply-demand landscape.

[China’s Aluminum Ingot Inventory Continues to Build Up, Aluminum Prices Remain in a High-Level Consolidation Pattern ]Overall, the geopolitical situation in the Middle East remained the core factor affecting the global aluminum market. A series of production cuts and damage incidents at Middle Eastern aluminum plants is expected to provide strong upward momentum for aluminum prices in and outside China, coupled with support from expectations of a gradual release of peak-season demand in China. In the short term, aluminum prices are expected to remain in a high-level consolidation pattern.

[SHFE Aluminum Night Session Closed Higher, with Geopolitics and Fundamentals Jointly Supporting Aluminum Prices] Overall, the geopolitical situation in the Middle East remained the core factor affecting the global aluminum market. A series of production cuts and damage incidents at Middle Eastern aluminum plants is expected to provide strong upward momentum for aluminum prices in and outside China, together with support from expectations of the gradual release of peak-season demand in China. In the short term, aluminum prices are expected to remain in a high-level consolidation pattern.

[Supply Tightening Coupled With Macro Tailwinds Keeps Aluminum Prices Firmly at High Levels] Overall, the geopolitical situation in the Middle East remains the core factor affecting the global aluminum market. A series of production cuts and damage incidents at Middle Eastern aluminum plants is expected to provide strong upward momentum for aluminum prices in and outside China, together with support from expectations of gradually releasing peak-season demand in China. In the short term, aluminum prices are expected to remain in a high-level consolidation pattern.