The operating rates of copper rod plants using copper scrap were 47.08% between July 29 and August 3, a rise of 6.88 percentage points from a week earlier, according to SMM survey of 15 plants with a capacity of 1.48 million mt/year).
On the supply side, copper scrap supply picked up last week, growing raw material inventories at copper rod plants using copper scrap in most regions of China. Purchases were made as required due to the high absolute price of copper. Traders actively purchased, pushing up operating rates of copper rod plants using copper scrap significantly. Notably, if end-user consumption continues to be weak and traders pick up cargoes slowly, copper rod plants using copper scrap will undergo financial pressure, and the operating rates will thus drop in the near term.
As of last Thursday, copper rod produced with copper scrap in Jiangxi was quoted at 68,650 yuan/mt on average, with a discount of 440 yuan/mt against SHFE front-month copper contract prices. Electric copper rod in east China was quoted with premiums of 795 yuan/mt over the contract, with the price spread widening to 1,235 yuan/mt between copper cathode rod and copper rod produced with copper scrap. As the economic advantage of copper rod produced with copper scrap continued to exist, there were some new orders.
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