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SMM Cu Survey: Operating Rates in June Continue to Fall at Copper Plate, Sheet, Strip and Foil Producers
Jul 18,2011 11:30CST
smm insight
Source:SMM
The average operating rate at the 20 major domestic copper plate, sheet, strip and foil producers was 61.8% in June;Raw material inventories at the 20 surveyed producers were 22.9% of production;

A recent SMM survey of 20 major domestic copper plate, sheet, strip and foil producers (total capacity: 957 kt/yr) revealed the following insights:

1) Operating Rates in June Continue to Fall
The average operating rate at the 20 major domestic copper plate, sheet, strip and foil producers was 61.8% in June, down slightly 2% from May and down 1.5% from the same period last year. Most producers in the survey told SMM that production in June was down from May, but declines in operating rates were less than expected. The slight declines in operating rates were due largely to narrow copper price fluctuations during June, which helped guarantee orders for copper plate, sheet, strip and foil producers. Although operating rates at copper foil producers were better than copper plate, sheet and strip producers, some copper foil producers reported consumption of copper foils was down in June. In addition, both  surveyed producers and downstream consumers were facing tight cash flows during June, which is the end of 2Q, also negatively impacting orders and operating rates. On-going electricity restrictions and high temperatures also affected production during June at the surveyed producers.    
 
Since orders from downstream producers were lower due to significant increases in copper prices during July, SMM believes operating rates at copper plate, sheet, strip and foil producers will continue to fall during July.    
 
2) Raw Material Inventories Up Slightly
Raw material inventories at the 20 surveyed producers were 22.9% of production, up slightly by 2.1% from May’s 20.8%, and mainly the result of significant stock replenishment by producers before copper prices rebounded in late June. Most of the surveyed producers told SMM that they are keeping copper inventories low in order to cut raw material costs, with some reporting they are unable to increase inventory levels due to cash flow problems.  


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