Falling demand from home appliances, cars slows operation across copper rods processors in Jun

SHANGHAI, Jul 8 (SMM) – Operating rates across Chinese copper rod manufacturers with copper cathode as feedstock averaged 75.65% in June, down 6.05 percentage points from May, dragged by weaker enamelled wire orders from downstream sectors of home appliances, cars, and transformers, an SMM survey showed on Friday July 5. 

On a year-over-year basis, rates also slid 5.41 percentage points in June. This was despite greater orders for submarine cables as well as communication wires and cables, which were driven by the 5G sector. 

To improve cash flows, copper rod producers slowed operation and cleared inventories, which also weighed on the operating rates in June. 

Some manufacturers cut offers for copper rod processing charges to promote trades as a slow season set in earlier than expected. 

SMM assessed June processing charges of 8mm copper rods for electrical applications at 550-750 yuan/mt in the eastern Chinese market, and charges of copper rods for manufacturing enamelled wire at 700-900 yuan/mt in the east. 

The ratio of raw materials inventory to monthly output at copper cathode-made rod producers stood at 10.69% in June, down 0.22 percentage point from the previous month, as processors slowed the purchases of raw materials after they lowered scheduled output for June.  

As the low season sets in across the power, real estate markets in July, the average operating rate across refined-copper-made rod producers may extend its decline to 71.96% in July. Large processors of copper rods already reported shrinking downstream orders for July.