SHANGHAI, Jan 31 (SMM) – The Chinese government has extended the Chinese New Year (CNY) holiday to February 2 in order to avoid further escalation of the recent coronavirus outbreak.
As of January 29, 10 provinces or cities, including Shanghai, Guangdong, Jiangsu, Zhejiang and Tianjin where copper processors are concentrated, have issued notices that required post-holiday resumption of local companies should be no earlier than 24:00 CST February 9.
An SMM survey showed that most copper smelters have operated normally since the CNY. Some smelters that closed during the CNY will resume as originally planned, except that office staff will return to work on February 3. On the other hand, raw material supply and production at smelters may be affected if the transportation control continues.
Most copper processors in Jiangsu, Zhejiang, Guangdong and Tianjin have received notices that resumptions should be no earlier than CST 24 February 9. Processors in other regions will mostly resume after February 8, except for a few that will resume on February 3. Some processors that are still waiting for further notice from the government on whether to resume production before February 3. A small number of processors said they are not sure if they can return to normal production on February 10. Processors plan to cut output as clients delay production resumptions and purchases.
On the other hand, most traders plan to resume business on February 3 when the Shanghai Futures Exchange (SHFE) re-opens, while a few will postpone resumptions to February 10. Trading activity is likely to be affected significantly during February 3 to February 7.
The spot copper market is likely to face heavy inventory pressure after CNY as production at smelters is little affected by the disease outbreak while most processors will delay resumptions to February 10 and cut output. Measures that are being taken to control the further spreading of the disease will also take a heavy toll on downstream consumption.
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