SMM Cu Survey: Average April Operating Rate at Copper Wire Rod Producers Down 3% MoM

SHANGHAI, May. 7 (SMM) – A recent SMM survey of 21 major domestic copper wire rod producers (total capacity: 3.47 million mt/yr) revealed the following insights:

1) Average April Operating Rate at Copper Wire Rod Producers Down 3% MoM
The average operating rate for April at the surveyed copper wire rod producers was 71.66%, down 8.08% YoY and 3.07% MoM. April is normally a peak demand period, but copper wire rod consumption has steadily fallen during April, due largely to lower investments in power projects, as well as restrictive measures in the real estate sector. During a previous SMM survey of wire and cable producers, which are downstream consumers of copper wire rod, wire and cable producers reported new orders during April were down and some producers were still trying to complete orders from late 2011. This lower downstream demand was affecting overall copper wire rod consumption, so SMM believes the average operating rate at copper wire rod producers will remain low in May.

2) Raw Material Inventories at Copper Wire Rod Producers Stable in April, Finished Goods Inventories Low
Although copper prices experienced steady declines during April, copper wire rod producers were still wary of replenishing stocks due to sluggish orders and the lack of clear copper price trends. Copper rod producers were only purchasing at low-end prices, so raw material inventories remained steady during April.

Finished goods inventories at copper wire rod producers were down during April and only 11.77% of production. Downstream enterprises were more interested in purchasing as copper prices fell, which helped consume some existing copper wire rod inventories.