Price: Further rise in copper scrap invoice tax points narrows refined-scrap copper price spread
In 2026, affected by the implementation of the reverse invoicing policy in China, invoice points in the copper scrap industry climbed sharply. The invoice point was 7.5% in January, rose to 9.5% in February-April, 11% in May-July, 13% in August, and increased further in September and October. High invoice points directly pushed up the procurement cost of tax-included copper scrap. For bare bright copper, for example, each 1 percentage point increase in the invoice point raised the tax-included procurement cost by about Yuan 800-1,000/tonne. This significantly squeezed downstream processors' profit margins, and making it difficult to continue using the refined-scrap copper price spread as an indicator of substitution between refined copper and copper scrap in actual transactions.
Data Source: Mysteel
The average import prices for red copper scrap (99%-99.5% Cu) in China between September 28 and October 9 decreased compared with the price between September 21 and September 24. Meanwhile, amid volatile domestic and overseas copper scrap prices, China's copper scrap import profit rose considerably after the National Day holiday, even reaching Yuan 923/tonne on October 9. Looking ahead, the constraints of the reverse-invoicing policy on China's scrap sector will be hard to ease in the near term, and invoice shortages are likely to intensify, keeping demand for imported scrap strong. Therefore, China's copper scrap import volumes are expected to remain relatively high in the near term.
Supply: Post-holiday copper scrap availability improves modestly
During the National Day holiday, China's copper scrap market saw low activity, with upstream holders offering few quotes and spot circulation slowing. After the holiday, rising copper prices increased holders' profits on existing inventory, strengthening their selling interest. Red copper scrap traders mostly sold on price rallies, and spot availability improved notably from pre-holiday levels. Brass scrap holders traded more flexibly, and with some downstream restocking demand, upstream shipments also rebounded from pre-holiday levels. Looking ahead, copper prices are expected to remain well supported at the bottom in the short term, so upstream copper scrap holders' selling profits should be acceptable. However, tight tax-included scrap supply under policy influence is expected to continue to restrain spot circulation.
Demand: Tight tax-invoiced cargoes supply weighs on spot trading
In terms of market trading, post-holiday copper scrap spot trading improved but remained weak. Regarding red copper scrap, although downstream enterprises showed some restocking interest after the holiday, scarce invoiced supply limited actual transaction volumes. Meanwhile, affected by policy, some regional enterprises also remained shut down, further restraining the recovery in raw material procurement demand. In terms of brass scrap, overall downstream demand was weak, as pre-holiday restocking interest was muted, with purchases largely limited to essential needs. After the holiday, some enterprises increased procurement activity for production needs, but no large-scale buying has emerged yet.
Looking ahead, persistently high invoice points will continue to squeeze downstream processors' profits, weighing on their willingness to procure raw materials, while operating rates are unlikely to recover markedly in the short term. Even if some enterprises intend to ramp up production to meet annual targets toward the year-end, tight circulation of invoiced scrap copper will continue to push copper scrap invoice points higher, further squeezing processing profits and curbing their copper scrap procurement demand.
More regular analysis and comprehensive data on China's copper industry are available in Mysteel Copper Weekly, Mysteel Copper Monthly, and Mysteel Copper Database. Reach out to us via Mysteel's official website: Latest & Reliable Copper Market Price in China | Mysteel, and follow Mysteel Non-Ferrous for more insights!
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Written by Zhaorui Cui, cuizhaorui@mysteel.com
Edited by Mingyuan Wang, wangmingyuan@mysteel.com
