SMM Cu Survey: Operating Rates Drop at Domestic Copper Plate, Sheet, Strip and Foil Producers

SHANGHAI, Feb. 21 (SMM) – A recent SMM survey of 17 major domestic copper plate, sheet, strip and foil producers (total capacity: 880 kt/yr) revealed the following insights.

1) Operating Rate Drops in February
According to the SMM survey, the average operating rate at the 17 domestic copper plate, sheet, strip and foil producers was 53.9% in February, down 2.3% from December's 56.2%. During the Chinese New Year holiday, most producers suspended production due to the low volume of orders, so output will also be low during February. Based on recent orders, downstream demand has not yet recovered, but most producers in the survey are optimistic and preparing for the traditional peak demand period from March to May.

2) Raw Material Inventories Up Significantly
A survey for December showed raw material inventories were only 20.7% of consumption, but during February, that figure rose to 28.5%, and was due to the following factors.  First, most domestic copper plate, sheet, strip and foil producers halted production during the holiday, but  still replenished raw materials before the holiday, believing post-holiday prices would be higher.  Second, many producers using scrap copper as a raw material also built stocks before the scrap copper refund policy was revoked in early 2011, causing inventories at those  smelters with scrap copper as a raw material higher than smelters using refined copper.

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