Metals News
[Cu] SMM Survey - Operating Rates at Copper Plate, Sheet, Foil Smelters
data analysis
01:16PM
Dec 7,2009
Source:SMM

SHANGHAI, Nov. 6 (SMM) -- A recent SMM survey of 18 copper plate, sheet, and foil smelters (total capacity: 760 kt/yr; monthly raw material consumption: 63.3 kt) revealed the following insights:

    1) Operating Rates

    The average operating rate at the 18 copper plate, sheet, and foil smelters was 60.1% during October, down 6.3% MoM, and down 6.3% YoY. Operating rates at large copper smelters experienced significantly declines, down 9.4% MoM. A number of smelters report downstream orders have fallen sharply since mid-October, so operating rates at smelters will fall further during November and December. In addition, recent fluctuations as well as current high prices have also dampened downstream purchasing interest. In general, the demand for copper plate, sheet, and foil is weaker compared with 2Q and 3Q levels.

    2) Consumption of Raw Materials

    Monthly copper consumption at the 18 smelters was 38.6kt, with consumption of refined and scrap copper 28.66 kt and 7.94 kt, respectively.

    3) Inventories of Raw Materials

    According to the SMM survey, raw material inventories at the 18 smelters accounted for 21.2% of monthly copper consumption, down 5.1% MoM. Copper prices have consistently hit new highs since mid-October, supported by a plunging US dollar index and market optimism for the economic recovery. Domestic copper prices fluctuated around RMB 50,000/mt, dampening purchasing interest by copper semis smelters. In this context, most smelters were only purchasing on as-needed basis, contributing to declines in raw material inventories.

    4) Scrap Copper Consumption Down

    According to the survey, scrap copper consumption at copper plate, sheet, and foil smelters fell significantly, as scrap copper traders kept price offers firm due to recent high copper prices. The higher offers for scrap copper helped narrow the price gap between scrap and refined copper, reducing its price advantage. The conditions of high scrap copper prices and limited market supply will continue given recent low levels of scrap copper imports, and this will leave scrap copper consumption limited as a result.

 

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