According to SMM statistics, as of November 28, 2025, domestic aluminum rod producers’ inventory days stood at 6.68 days, a decrease of 0.36 days week-on-week, indicating an inventory drawdown trend with slightly eased supply-side pressure. The inventory ratio was recorded at 78.17%, down 6.74 percentage points from the previous week. Aluminum rod processing fees continued hovering at low levels throughout the week. Coupled with the bottoming-out recovery of aluminum prices, support for processing fee hikes remained insufficient.
According to SMM statistics, as of November 28, 2025, domestic aluminum rod producers’ inventory days stood at 6.68 days, a decrease of 0.36 days week-on-week, indicating an inventory drawdown trend with slightly eased supply-side pressure. The inventory ratio was recorded at 78.17%, down 6.74 percentage points from the previous week. Aluminum rod processing fees continued hovering at low levels throughout the week. Coupled with the bottoming-out recovery of aluminum prices, support for processing fee hikes remained insufficient. Downstream procurement sentiment improved modestly during the week, yet market inventories remained undigested. Amid ongoing supply-demand imbalance, the momentum for processing fee recovery remained relatively weak. Regarding regional processing fees (as of October 31, 2025): Jiangsu offered RMB 200-300/mt, Hebei RMB 100-200/mt, and South China RMB 300-400/mt. For other regions: Shandong quoted RMB 0-100/mt, Inner Mongolia RMB -50-150/mt, and Henan RMB 200-300/mt. Current processing fees are consolidating at the bottom with limited downside potential. As fee fluctuations closely correlate with plant inventories and aluminum prices, inventories are expected to return to safe levels by December, providing fundamental support for processing fees.
This week’s aluminum cable operating rate rose 0.6 percentage points week-on-week to 63%, continuing its moderate recovery trend. This improvement stems from marginally better orders as the industry gradually emerges from seasonal lows, supporting production recovery. Though orders have improved, they haven’t reached peak-season delivery levels. Winter temperatures now constrain project progress, while grid-side procurement sustainability expectations weaken. With year-end approaching, companies show limited willingness to build finished product inventories, maintaining only normal delivery-paced production. Although November saw concentrated grid bidding (with new order growth expected in December), deliverable orders within this year remain limited. The market awaits next year’s grid concentrated delivery cycle – maintaining medium-to-long-term demand optimism despite persistent short-term weakness. Next week, while the operating rate remains on a recovery path, constraints including winter construction limits, weakening grid procurement momentum, subdued year-end stocking interest, and unremarkable order growth will cap further upside potential.
SMM Analysis：As of November 28, the average SMM domestic zinc concentrate TC was recorded at 2,050 yuan/mt in metal content, and the SMM imported zinc concentrate weekly index stood at $61.25/dmt. Overall, the current zinc concentrate TC has decreased by 600 yuan/mt MoM from early November, with the November imported zinc concentrate index down $33.47/dmt MoM
As of November 28, the average SMM domestic zinc concentrate TC was recorded at 2,050 yuan/mt in metal content, and the SMM imported zinc concentrate weekly index stood at $61.25/dmt. Overall, the current zinc concentrate TC has decreased by 600 yuan/mt MoM from early November, with the November imported zinc concentrate index down $33.47/dmt MoM. Both domestic and international processing fees have significantly declined, with domestic TCs about to return to the start-of-year level. Why did the processing fees drop so rapidly in November? When will the turnaround come? Let’s analyze this from a supply and demand perspective.
Regarding domestic processing fees, winter is traditionally a season for reduced production of domestic zinc concentrates. Currently, at the end of November, mines in Tibet, Qinghai, and other regions have started to shut down. The output of domestic zinc concentrates in November and December has consecutively decreased, impacting the market supply of zinc concentrate. Additionally, although the SHFE/LME price ratio in November improved compared to October, the loss on importing zinc concentrates remains around 2,000 yuan/mt. Considering economic factors, smelters continue to actively purchase domestic zinc concentrates. In the context of a tight domestic concentrate market, some traders have a strong sentiment towards stockpiling, leading to a greater willingness to lower processing fees. Under the influence of multiple factors, the domestic zinc concentrate TCs in November and December have accelerated their decline.
For imported processing fees, the decrease in November exceeded market expectations. On one hand, it is the time for winter stockpiling, and smelters’ demand for zinc concentrates is robust. Traders continuously lowered their offers for imported zinc concentrates. Moreover, as the SHFE/LME price ratio improved in November, the shortage of domestic zinc concentrates became more severe. Some smelters, to maintain normal operations, showed an improved interest in inquiring and purchasing imported zinc concentrates. The increase in demand led to a rapid decline in imported zinc concentrate TCs, and it is expected that the imported TCs will continue to fall in December.
Looking ahead, according to SMM calculations, smelter losses gradually expanded in Q4. Currently, the profit of smelters, excluding sulphuric acid and by-products, has already dropped to over 1,000 yuan/mt. In November, some smelters cut production due to this. As the processing fees continue to decline in December, it is anticipated that more smelters will undergo maintenance and reduce production. Coupled with the regular maintenance shutdowns during the Chinese New Year, the demand for zinc concentrate from smelters may weaken. However, considering that many domestic mines resume production in March and April, if there is no significant reduction in smelter output, the probability of a continued tight supply of domestic zinc concentrates in Q1 next year is high.
(The above information is based on market collection and comprehensive evaluation by the SMM research team. The information provided in this article is for reference only. This article does not constitute direct advice for investment research and decision-making. Customers should make cautious decisions and should not replace their independent judgment with this information. Any decisions made by customers are not related to SMM.)
The operating rate for secondary copper rod in November was 23.84%, higher than the expected 27.68%, down 2.62% MoM and down 12.46% YoY. The secondary copper rod market operated under pressure overall due to multiple factors including policy uncertainty, weak demand, and copper price fluctuations. The average monthly operating rate for the secondary copper rod industry continued to fluctuate at low levels, declining further from October and also showing a downward trend YoY. At the beginning of the month, stimulated by a pullback in copper prices, end-user restocking demand was briefly released, driving a slight rebound in the weekly operating rate.
The operating rate for secondary copper rod in November was 23.84%, higher than the expected 27.68%, down 2.62% MoM and down 12.46% YoY. The secondary copper rod market operated under pressure overall due to multiple factors including policy uncertainty, weak demand, and copper price fluctuations. The average monthly operating rate for the secondary copper rod industry continued to fluctuate at low levels, declining further from October and also showing a downward trend YoY. At the beginning of the month, stimulated by a pullback in copper prices, end-user restocking demand was briefly released, driving a slight rebound in the weekly operating rate. However, as copper prices rebounded above 86,000 yuan/mt, downstream willingness to chase higher prices was noticeably insufficient. Additionally, enterprises in key production areas such as Jiangxi and Anhui maintained a wait-and-see stance regarding local incentive policies related to Notice No. 770, leading to more cautious production decisions. This resulted in the operating rate pulling back again to around 18.29% during the mid-to-late month. The price difference between copper cathode rod and secondary copper rod fluctuated within the range of 1,500-1,800 yuan/mt. Although the economic advantage of secondary copper rod was theoretically significant, orders from end-use sectors like wire and cable and home appliances showed no substantial improvement, preventing the price spread advantage from effectively translating into actual consumption momentum. Profit margins continued to be squeezed, with weekly gross profit once falling to 834 yuan/mt, down by up to 186 yuan/mt MoM. On one hand, raw material prices remained relatively firm; on the other hand, finished product sales faced intense competition due to high inventory hoarding by traders. Enterprises often had to reduce prices by 200-300 yuan/mt to secure deals, leading to frequent occurrences of “price inversions.”
A notable structural change was the increase in arbitrage activities between the physical and futures markets. As the price difference between primary metal and scrap remained at a relatively high level, some traders bought secondary copper rod and hedged in the futures market to lock in profits. This led to significant resources being tied up as financing collateral, causing social inventory to climb continuously without flowing into actual consumption, creating hidden supply pressure. According to surveys, inventory levels of secondary copper rod in public warehouses continued to increase, reflecting a divergence between physical demand and financial attributes. Regional disparities were significant. In Jiangxi, a core production capacity area, production cuts and shutdowns were prominent due to policy uncertainty, with some orders shifting to less affected regions like Hubei and Henan. However, an overall supply gap persisted. Towards month-end, some enterprises in certain regions were forced to suspend production temporarily due to issues with issuing VAT invoices, further suppressing any potential increase in the operating rate. Although the monthly price center for copper shifted upward, market transactions overall displayed a pattern of “rising prices but thin volume.” Secondary copper rod enterprises largely maintained a hand-to-mouth raw material procurement strategy, with raw material inventory down about 27% MoM, while finished product inventory remained high due to sluggish shipments. Looking ahead to December, the secondary copper rod market is expected to continue experiencing weak supply and demand, with the traditional consumption off-season and high inventory pressure being the main constraints. The clarity of policy developments will be a key variable. If the details of Notice No. 770 are clarified in December, it will help stabilize enterprise expectations, promote the gradual resumption of production by enterprises in Jiangxi, Anhui, and other regions, and improve raw material demand. However, even if the policy is implemented, its effects will take time to translate into actual operating rates. On the demand side, orders from end-user wire and cable enterprises are unlikely to see significant improvement by year-end, as progress in power grid construction, construction projects, and other initiatives slows due to falling temperatures. High copper prices will also dampen downstream stocking enthusiasm. The price difference between primary metal and scrap is expected to remain within the current range, but if arbitrage activities remain active, social inventory pressure could intensify, weakening the momentum for a price rebound. In the import market, although customs inspection efficiency has improved, year-end arrivals will still be dominated by long-term contracts, limiting the impact on domestic supply.
The European tungsten market is experiencing a severe supply crisis, driving APT prices to $750-780/mtu after a $100 surge in just two weeks. This unprecedented rally, far exceeding gains in China, stems from a perfect storm: China’s export controls have halted APT flows, overseas smelters face raw material shortages, and European scrap supply is strained. With global mine supply increasingly funneling to China and no immediate relief from new projects, prices are expected to remain high in 2026. Market focus should be on Chinese supply-chain dynamics, the critical role of scrap tungsten, and the reorientation of global mine flows.
According to SMM surveys, the offered price for European APT CIF Rotterdam has been adjusted upwards to $750-780 per mtu, while the offered price for Ferrotungsten in Rotterdam warehouses has also reached $92-95 per kg tungsten. Within just two weeks, the APT price has increased by $100 per mtu. Although domestic tungsten industry chain prices in China are also rising, the recent price increases in the European market have been significantly sharper than those in China.
The core issue currently facing the European market is no longer just price volatility, but a severe shortage of raw materials. There are currently no continuous spot transactions for APT and tungsten oxide in Europe, with the last traceable transaction price still hovering around $680-700 per mtu. The supply-demand imbalance is the direct driver behind the continuous price increases.
The current raw material shortage primarily stems from three factors:
China Export Controls Disrupt APT Supply: Since the implementation of export controls in China in April, exports of APT and intermediate products from China have plummeted. October customs data showed Chinese APT exports had fallen to zero. Although products like ferrotungsten are not explicitly controlled, they still face strict export restrictions. According to SMM surveys, currently only a few qualified large enterprises can obtain export licenses, and each transaction requires going through cumbersome approval processes, taking approximately four months from declaration to completed shipment. China’s export restrictions have become the primary factor for the spot shortage in Europe.
Overseas Smelters Face Raw Material Challenges: Smelters outside China are also encountering supply issues. SMM understands that some established smelters in Asia are experiencing shortages of mine supply, and overseas mine prices are rising in line with the market. This threatens the APT supply Europe receives from other regions, with many previous orders failing to be delivered on time. As these companies face spot shortages, they have correspondingly raised their offered prices for APT CIF Rotterdam.
Difficulty Overcoming European Domestic Resource Bottlenecks: The fundamental problem for the European domestic smelting sector is the lack of mine resources. Although several tungsten mining projects are actively advancing in Europe, it takes 3-5 years from mine development to stable supply, making these projects unlikely to alleviate the current shortage in the short term. Against this backdrop, European smelter production primarily relies on tungsten scrap recycling. However, tungsten scrap resources are also becoming increasingly tight, and their prices have been pushed to high levels in the European market. Currently, European smelters are basically only able to meet their own needs and fulfill long-term contracts. The volume of raw materials like APT and ferrotungsten available for external sales continues to shrink, further tightening raw material supply in the European spot market.
This leads to a question: Given the clearly diverging supply-demand structures between the Chinese and European tungsten markets, why do European price trends still closely follow fluctuations in the Chinese market?
The reason is that global mine resources are increasingly flowing to China. As China’s tungsten industry chain model restructures and the share of domestic mines shrinks, domestic production’s reliance on imported concentrate has significantly increased. Customs data shows that China’s total tungsten concentrate imports from January to October 2025 were approximately 15,809 tonnes, a substantial increase of 61.4% year-on-year. The continuous expansion of China’s demand share for imported tungsten concentrate directly impacts the ability of other regions to access overseas mine resources. In the absence of new project supply increments, price fluctuations originating from the mine level in China are being transmitted to the global market, driving synchronized price volatility for products like APT and ferrotungsten.
Based on the current market structure, international tungsten prices are forecast to maintain their high level through 2026. As previously analyzed, the new industry chain pattern requires support from mine raw materials, while supply-demand dynamics are also being reconfigured—these factors will continue to provide strong support for prices.
It is recommended the market focus on the following three directions: First, the supply-demand changes and price trends within China’s industry chain. Second, the supply-demand situation in the overseas tungsten scrap market, where reliance on scrap tungsten is expected to increase significantly. Third, changes in the flow of global mine resources and the progress of new projects, with expectations that some mine supply will gradually shift towards European and American markets.
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