SHANGHAI, Jan. 16 (SMM) – A recent SMM survey of 20 major domestic copper smelters (total capacity: 4.81 million mt) revealed the following insights:
1) Operating Rates Up to 90.06% in December
According to the survey, the average operating rate at the surveyed copper smelters was 90.06% in December, up 6.5% MoM and also up YoY. In December, most major domestic copper smelters maintained normal production, with some ramping up production to complete annual production targets. Output at copper smelters with scrap copper as raw material also increased as the inverted price difference between refined and scrap copper moved toward normal and due to improvements in scrap copper supply.
2) Refined Copper Inventory at Copper Smelters Down, Scrap Copper Supply Improves
In December, refined copper inventories at copper smelters were 68,200 mt, down by 6,350 mt from November. The lower inventories at copper smelters were due mainly to increased sales necessary to generate cash at the year’s end.
Copper concentrate inventories at copper smelters were ample. Spot TC/RC for copper concentrate remains low at USD 30-40/mt (cents 3.0-4.0/lb), but copper smelters made purchases when copper prices were low in order to replenish copper concentrate stocks. In early December when copper prices rose to RMB 57,000/mt, market supply of scrap copper also rose, helping ease difficulties in replenishing goods for those copper smelters with scrap copper as raw material. However, those smelters again faced difficulties in securing raw materials as copper prices fell rapidly.