SHANGHAI, Mar. 14 (SMM) –
A recent SMM survey of 17 major domestic copper wire rod producers (total capacity: 2.96 million mt) revealed the following insights:
1) Operating Rates Up MoM
According to the SMM survey, the average operating rate at the 17 major domestic copper wire rod producers was 66.2% in March, up 1.4% from January’s 64.8%. Despite no significant increases in operating rates, producers in the survey told SMM that production had improved greatly from February, although there was no survey in February to compare against. However, any perceived improvement was growing as copper prices were falling. Orders will likely continue to grow, which will also improve operating rates. It is worth noting that orders for low-oxygen copper rod have fallen as scrap copper has lost its price advantage, helping improve demand for oxygen-free copper rod.
2) Raw Material Inventories Up, Finished Goods Inventories Flat
Based on the survey, raw material inventories at the surveyed producers were 23.64% of production in March, up 3.42% from January’s 20.22%. During our survey’s period, spot copper prices fell below RMB 70,000/mt, which improved purchasing interest from both end-users and copper rod producers. Some producers, which originally took a wait-and-see attitude when copper prices were high, were now replenishing goods due to low inventories. Other producers with a more optimistic outlook believed now was a good opportunity to build stocks with prices below RMB 70,000/mt.
The survey also revealed finished goods inventories at producers in March were little changed from January levels.
Copyright © SMM. All Rights Reserved
None of this material may be used for any commercial or public use in any forms or means, without the prior written consent of SMM. For reproduction issue, please contact us by email: email@example.com