Rising raw materials prices and tepid consumption pressured cable producers. When will wire and cable consumption return to the level of a high season?  

The SMM Copper Concentrate Index stood at $40.12/mt in February, a decrease of $5.88/mt from the previous month. As of February 26, the SMM copper concentrate index stood at $37.15/mt, a month-on-month decline of $4.93/mt.

Many factories and traders cleared out copper scrap inventories before CNY. Newly produced copper scrap is unavailable until production resumes for a period of time after CNY. This, together with reluctance to sell amid bullish sentiment, resulted in limited amounts of copper scrap that was available in the market after CNY.

Manufacturing activities across nickel downstream sectors in China retreated to the contractionary territory in February.  SMM data showed that the purchasing manager's index (PMI) for downstream nickel industries, including stainless steel, electroplating, alloy and battery, stood at 46.93 in February, down 3.68 points from January. A reading below 50 indicates contraction.

Nickel futures prices rose significantly last week and then fell to around 140,000 yuan/mt on February 26, and the spot transactions rebounded. Currently, the downstream industries of refined nickel have fully resumed work, and the orders from alloy casting enterprises are relatively stable as they had restocked before CNY and maintained production in holiday.

SMM has surveyed 41 aluminium processing enterprises across 12 provinces. Operating rates across major aluminium processors increased 19 percentage points from a week ago to 60.1% last week.

Yangshan copper premiums with a quotation period in March stood at $68-84/mt under warrants during February 22-26, and between $65-80/mt under bill of lading. The SHFE/LME copper price ratio stood at 7.35 as of February 26.

Spot premiums in Shanghai rose to 70 yuan/mt on February 18 from zero ahead of CNY due to costs during CNY holidays. However, spot premiums turned into wide discounts as of February 25 as SHFE copper prices surged, which stood at around 250 yuan/mt, a decline of nearly  460%. This signified that investors were selling aggressively to generate cash amid cash flow issues. Downstream inquiries were brisk but sellers refrained from lowering their quotes, with spot discounts stabilising between 150-140 yuan/mt.

Aluminium smelters did not restock actively after CNY, while increased inventory prompted alumina plants to cut offers. As of February 26, the SMM alumina price index/SMM A00 aluminium price ratio hit a 4-year low of 0.136.

The most-traded SHFE 2104 copper contract rose by its daily limit on last Monday February 22, but dropped below 67,000 yuan/mt last Friday amid rising US Treasury yield after breaking above the 70,000 mark on February 25.