Orders continued to pick up across copper processing enterprises amid lower copper prices

SHANGHAI, Mar 9 (SMM)—Wire and cable: Operating rates did not rise sharply as higher costs driven by copper price gains post-CNY holidays shrank profits. Companies reported limited new orders even as copper prices continued to fall last week. New engineering projects have been low post-CNY holidays, while some of the enterprises remaining in operations were ending construction of projects scheduled for the end of last year, lowering purchases of cables significantly. However, with the stability of copper prices and the increase in engineering projects in late March, operating rates at cable companies are expected to recover to around 70%.

Copper rods produced with copper cathode: Overly high copper prices post-CNY holidays have hampered  downstream companies from restocking, posing significant pressure on copper rod companies using copper cathode as raw material. According to SMM survey, new orders at copper rod companies increased as copper prices dropped last week, and production has improved compared with the previous week. However, the current high copper price has depressed downstream consumption. Meanwhile, a price spread of over 1,000 yuan/mt between copper cathode and copper scrap has boosted consumption of copper rods produced with copper scrap, limiting new orders at copper rod plants using copper cathode as feedstock last week. Consumption of copper rod produced with copper cathode is expected to gradually pick up as copper prices stabilise and downstream consumption improves.

Copper tube: The high season will set in as demand from engineering and installation gradually increases in March. Copper tube plants have increased finished product inventory despite high copper prices. In addition, production schedules at air conditioner manufacturers in March increased around 30% year-on-year; alloy tube output also maintained a steady growth, and exports of tubes used in sanitary and automobiles performed well.

Copper plate, strip and foil: Orders from automobiles and electronic communications ensured good performance of the copper plate, strip and foil industry. However, producers said that most of the current orders are placed ahead of CNY which have not been execute, while new orders have declined recently. Orders at small and medium-scale enterprises have decreased significantly. Higher-than-expected copper prices have diminished demand, sidelining downstream plants and slowing shipments. However, producers are optimistic over March in view of strong downstream demand.

Enamelled wire: Most of the enamelled wire companies resumed production in March. With the declines in copper prices last week, new orders have improved significantly. Companies reported dip purchasers and stable orders from motors and transformers plants.