SHANGHAI, Dec. 23 (CBI China) -- A recent CBI survey of 23 major domestic copper smelters revealed the following insights:

    1) Operating Rates  
    According to the survey, the average operating rate at the 23 copper smelters was 67.6% during November, down 3.1% from October, and the lowest level since February 2007.  Operating rates at copper smelters with capacity above 300kt/yr experienced the largest reduction in rates, due mainly to sharp declines in output at Jiangxi Copper for maintenance. Meanwhile, rates at small-medium sized smelters increased by 10%. According to CBI, the decline in copper prices slowed during November and December, and spot premiums remained high. The ratio of LME and SHFE prices favors copper concentrates, so operating rates at smelters with copper concentrates as raw material increased, while the rates at smelters with scrap and crude copper as raw material remained low due to limited supply and higher prices. 

    2) Limited Supplies of Scrap Copper, Relative Ample Supplies of Copper Concentrate
    Copper smelters report supply of copper concentrate was ample, with spot TC/RC increasing to USD 88/mt (8.8 cents /lb), and that copper concentrate inventories at most smelters can only meet the minimum needs of production. Imported scrap copper prices declined sharply during October and November, leaving tight scrap copper supply, and higher scrap prices.  As a result, operating rates at smelters with crude and scrap copper as raw material were still low.

    3) Inventories of Refined Copper Stabilize
    The survey disclosed inventories of refined copper at major copper smelters remained stable with only small increases.  Average inventories of refined copper in November were 1.7 days output, increasing to 2 days in December, but still low. Turnover of refined copper was rapid due to high premiums and limited supply in spot markets. As copper prices fluctuated, smelters were keeping refined copper inventories low in order to minimize risk.

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