Metals Market Faces Turbulence

In March, China's secondary copper rod producers ramped up operations, with operating rates rising to 40.18%—a sharp recovery from February, exceeding expectations. This boost was largely due to normalized working days after the Lunar New Year and early-month copper price gains, which created arbitrage opportunities for traders. Despite soft end-user demand, active ordering from traders helped maintain momentum.

Raw material inventories increased only marginally, as suppliers were reluctant to sell unless copper prices exceeded 83,000 yuan/mt. Meanwhile, finished product stocks also rose slightly, reflecting slow inventory turnover as buyers delayed pickup. Nonetheless, end-users in the wire and cable sector resumed restocking, supporting demand alongside a favorable price spread between refined and secondary copper rods.

However, April’s outlook appears less optimistic. Intensified trade tensions between China and the U.S. led to sharp copper price declines and created a volatile pricing environment for secondary raw materials. This uncertainty has caused producers to scale back purchases and take a cautious stance, with expected operating rates falling to 36.8%. End-users may shift toward refined copper rods as secondary products lose price appeal.

Beyond copper, steel rebar futures in China dropped over 7% year-to-date, weighed down by fears of reduced construction activity amid trade disputes. While tariffs have had a lesser direct impact on steel than on base metals, bearish sentiment is spreading. Even so, Beijing’s hints at economic stimulus and possible capacity cuts offer some upside for the sector.

Iron ore prices have also slumped, hit by weak property markets and uncertainty over global trade. While industrial production and hot metal output provided some support, falling home prices and a sluggish real estate sector continue to threaten broader steel demand.

On the other hand, platinum rebounded above $930/oz after hitting a three-month low earlier in April. The recovery was buoyed by a weaker U.S. dollar and President Trump’s decision to pause tariff hikes for some trade partners. Still, rising tariffs on Chinese goods and retaliation from Beijing have clouded the outlook for precious metals.

In summary, while March brought a rebound in copper-related production, the broader metals market remains on edge. From industrial metals to precious ones, ongoing trade disputes, fluctuating prices, and shifting supply dynamics are driving volatility and prompting cautious optimism at best.