Operating Rates at Copper Semis Plants Tumbled in January and Will Rebound in February

China copper semis output is estimated at 1.36 million mt in January, down 37.34% month-on-month (MoM) and 15.09% year-on-year (YoY). The average operating rate of copper Industry stood at 41.15% in January, down 24.48 percentage points MoM and 20.78 percentage points YoY.

In January, the overall operating rate of copper semis products dropped as expected mainly due to the influence of the CNY holiday. And many workers returned to their hometowns in advance for the CNY holiday and were absent for a longer period than previous years. Operating rates fell across copper semis plants, wtih the smallest decline in copper pipe industry. Copper plate/sheet and strip plants (53.67%)>copper pipe plants (47.42%)> copper cathode rod plants (36.39%) The prosperity of the copper plate/sheet and strip industry was the strongest as the leading companies only closed for a short period on brisk orders. The copper pipe industry was supported by the peak season for home appliances, albeit to a lower degree compared to the prior years. The operating rate of the copper cathode rod industry dropped the most, mainly because the CNY-driven closures of downstream real estate and construction industries as well as the surge in copper price greatly reduced downstream orders.

Overall, overseas demand did not improve much in January. Although the inflation in European countries and the US has eased, more large enterprises were laying off employees, which made households to spend less. Domestic demand diminished sharply in January due to the CNY holiday. Both domestic and overseas demand were weak and the overall operating rate of copper semis industry in January dropped significantly.