SHANGHAI, Nov. 28 (SMM) –A recent SMM survey of 22 major domestic copper plate, sheet, strip and foil producers (total capacity: 1.01 million mt/yr) revealed the following insights:
1) October Operating Rates Continue to Fall in October
The average operating rate during October at the 22 major domestic copper plate, sheet, strip and foil producers was 55.8%, down by 3.4% from September levels, and also down on a YoY basis. Based on feedback from the surveyed producers, consumption of copper plate, sheet, strip and foil should have improved in October, but was below expectations. Demand from domestic electronics and automobile sectors have remained low since July, with tight cash flows also negatively affecting demand. Falling export orders also reduced demand for copper plate, sheet, strip and foil. As a result, some copper plate, sheet, strip and foil producers opted to reduce production on fears that copper prices during October would again decline following September’s price volatility. The long Chinese National Day holiday period was also a negative factor affecting October operating rates.
2) Copper Plate, Sheet, Strip and Foil Producers Remain Cautious Towards Stockpiling Raw Materials
Raw material inventories at the 22 major domestic copper plate, sheet, strip and foil producers were 21.7% of consumption in October, up slightly by 3% MoM. Copper prices generally remained below RMB 55,000/mt during October, but producers still chose to only slightly increase raw material stocks, an indication of cautious sentiment.