Copper rod prices rose in late October across China and the U.S. due to shrinking inventories and disruptions to global supplies. In China, a declining stockpile level sent premiums rebounding. However, gains were capped as the price of copper simultaneously rose to a record-high. The secondary copper rod industry also went through major restructuring in Q3 2025 amid policy uncertainty resulting from Notice No. 770. Prices rose in the U.S. after some unexpected setbacks at key mines in Africa, Chile, and Indonesia raised fears of a supply deficit in 2026, with major producers such as Anglo American and Teck warning that their respective outputs would be lower next year.
Copper rod prices in China went up 1.6% in the week ending October 31, driven by just-in-time raw material procurement and a slight inventory dip to 26,700 mt. Copper cathode output fell 2.62% MoM, while the operating rates at major copper rod firms dropped to 60.43%, down 1.12 percentage points MoM, mainly due to record-high copper prices. Despite this, demand remained steady as downstream orders for enamelled wire—especially in new energy and transformer sectors—showed signs of recovery, supporting copper rod production.
The actual enforcement of Notice No. 770 has dramatically changed the dynamics for copper rod producers, particularly those dependent on secondary copper. It has significantly increased tax burdens on the growth of copper rod producers, particularly in Jiangxi, with over 50% of China's secondary copper rod capacity. The exclusion of "dual refunds" and retention of only 30% VAT refund led to an increase in effective tax rate from 5.5%–6.5% to 8.3%–8.9%. In response to the increased cost pressures, companies began to use taxed recycled copper and requested lower prices for non-invoiced scrap. Several Jiangxi producers halted operations and maintained only anode plate output. As a result, orders started to shift into regions with loose enforcement, such as Hubei and Tianjin, which temporarily boosted local operating rates.
The dual support of improving macroeconomic conditions and disruptions on the cost side suggests that copper rod prices may continue their upward trend in the short run.
Copper rod prices in the U.S. rose by 1.3% on a week-over-week basis, reflecting the tightening global supply situation. Ongoing closure of Indonesia’s Grasberg, one of the world’s largest copper mines, with Chile’s Antofagasta likely to produce only the bottom-end of its guidance of 660,000–700,000 mt for 2025, has worsened the supply situation.
The ICSG revised its projection for 2025 global mine supply growth downwards from 2.3% to just 1.4%, signaling a more pronounced shortage. This contraction is directly inflating input costs for copper rod manufacturers.
Adding to the strain, LME copper inventories slipped in October, ending the month at 135,975 tons—a 4.1% drop from the beginning of the month. These factors are driving up copper rod pricing and shrinking margins along the supply chain.
The relentless expansion of data centers across the U.S. is intensifying downstream demand for copper rod. In Kansas City, hosting provider Patmos has expanded its AI data center, adding more colocation space designed specifically for high-density GPU, HPC, and AI workloads-those requiring generous copper-based electrical infrastructure. Meanwhile, Meta is fast-tracking development of a new data center in Gallatin, Tennessee, using rapid deployment structures to meet surging digital demand.
To feed this increasing energy demand driven by these facilities, Babcock & Wilcox has partnered with Denham Capital in next-generation power solutions-investing in conversions of coal-fired plants to cleaner-burning natural gas, projects that further amplify copper rod usage in power transmission and distribution systems.
Looking ahead, the U.S. copper rod market is expected to enter a supply deficit by 2026. As global copper mines continue to underperform and inventories become further constrained, the sector is under growing pressure to meet surging demand amidst tightening supply.
