SHANGHAI, Sept. 13 (SMM) –A recent SMM survey of 21 major domestic copper plate, sheet, strip and foil producers (total capacity: 951 kt/yr) revealed the following insights:
1) Operating Rates in August Flat With July
The average operating rate for August at the surveyed producers was 61.2%, virtually flat with July’s 59.6% and little changed from the same period last year. Based on producer feedback, low copper prices gave market demand a boost and were mainly reflected in stronger demand for copper strips used in cables and transformers. Demand for copper strips used in automobile water tanks and electric copper strips, however, remained weak. Copper foil producers said export orders of copper foil during August were down due to RMB appreciation.
In addition, some copper plate, sheet, strip and foil producers in south China were affected by power restrictions.
2) Producers Show Little Interest in Stockpiling Raw Materials
At present, raw material inventories at domestic copper plate, sheet, strip and foil producers are 24.6% of production, down 4.4% from the 29% mark a month ago. Most producers in the survey told SMM that a shortage of capital was the main reason behind low inventories. In addition, over half of the producers believe copper prices will continue to fluctuate narrowly and are mainly consuming existing inventories instead of building stocks.