[Cu] CBI Survey - Operating Rate at Copper Cable Producers Lower Than Expected

SHANGHAI, Dec. 16 (CBI China) -- A recent CBI survey of 20 major domestic copper cable producers (annual copper consumption: 755 kt, monthly copper consumption: 62.9 kt) revealed the following insights:

1) Operating Rates

    According to the survey, average operating rates of the 20 producers was 66.0% in December, down slightly from November levels. Operating rates at copper cable producers with capacity above 50 kt/yr remained stable, down only 0.8%.  Operating rates at medium and small producers fell by 4% and 15.3% respectively. Large producers had relatively stable copper cable orders, while orders for small-medium scale producers fell sharply.

2) Orders Forecast

    According to the survey, copper cable producers expected the order in January next year will decline, of which 75% predicted the orders would decline, as January is the traditional off-peak season for copper cable, Spring Festival approaches, the operating rate of downstream is low, the projects will be delayed, all these factors will result in the decline in copper cable orders. 25% of the producers believed that orders in January would be flat at December levels. These producers will continue to produce during the Spring Festival due to recent orders.

3) 84% of Producers Believe Copper Prices will Continue to Fall 

    84% of the producers surveyed believe that copper prices will continue to fall, and they said currently copper prices lack the long factors, being unable to rebound, along with the deepening financial crisis, the prices are expected to decline further. 11% of the producers believe that the prices will fluctuate in the market outlook, and they believe the copper prices are difficult to rebound, but with a certain support, so the declining rate will not expand again, and the prices will fluctuate. The remaining 5% believe that copper prices may rebound due to the downward trend of U.S. dollar.

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