**Abstract**
As is widely known, copper serves as a key indicator of global economic health. Recently, the market has been fluctuating unpredictably, and with the end of the second quarter approaching, the copper market has once again hit new lows, placing additional pressure on copper enterprises.
"In early June, order volumes have dropped significantly," said an executive from a major copper company. "We are in the final month of the second quarter, and most orders were placed in May. The current trend suggests that new orders for the next quarter may not be strong enough to offset the decline. However, due to the downward pressure from the copper market, many market participants remain pessimistic, and both order volume and profit margins continue to shrink."
According to the Fubao Copper Research Group's June report, copper companies saw a 4% drop in production at mid-month compared to May, reflecting the negative impact of the peak season and price volatility on downstream industries.
The scrap copper market has also seen a sharp downturn. During a recent on-site visit, Fubao found that many waste copper factories in Jiangsu were operating at a standstill, with little to no vehicle loading or transactions taking place throughout the day. Some traders mentioned that previously, they could still make a profit of around 500 yuan per ton, but now even a small margin of 100-200 yuan is considered good, while some are facing losses.
Copper processing fees are also declining. "The price of copper has been falling steadily, and our processing fees are now about 200 yuan lower than the same period last year," said Mr. Xie, a manager at a copper rod factory.
With copper prices continuing to fall, downstream companies are struggling. On one hand, low prices are eroding their profits, and on the other, they are stuck with inventory that’s difficult to sell. At the same time, tighter banking regulations have made it harder for small businesses to secure financing. Without access to capital, these companies find it increasingly hard to operate.
Currently, the broader financial market is experiencing liquidity shortages. While the central bank has provided some support to certain institutions, this only offers temporary relief. To truly ease concerns about capital flow, more decisive actions from the central bank would be needed. However, given the busy end-of-quarter reporting season, the central bank has not taken any significant steps before July, leaving interbank debt pressures still high.
Overall, the weak demand from downstream sectors highlights the fragility of the market. For small and medium-sized copper enterprises, the immediate survival environment remains challenging. Short-term expectations from manufacturers are likely to influence the supply side of the copper consumer market. From a technical perspective, the copper market still faces strong resistance, and it remains in a bearish phase. While there may be occasional positive signals, they are unlikely to reverse the overall downward trend.
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