SMM Cu Survey: April Average Operating Rate at Copper Smelters Remains Stable at 87.34%

SHANGHAI, May. 14 (SMM) – A recent SMM survey of 21 major domestic copper smelters (total capacity: 5.21 million mt/yr) revealed the following insights:

1) April Average Operating Rate at Copper Smelters Remains Stable at 87.34%
The average operating rate for April at surveyed copper smelters was 87.34%, virtually flat with March's average level, and a result of stable production at major domestic copper smelters.

The SHFE/LME copper price ratio remains low, incurring losses for both imported scrap copper and copper concentrate. Coupled with spot TC/RCs for copper concentrate at only USD 40/mt (cents 4.0/lb), copper smelters had little interest in buying spot copper concentrate during April in order to expand production, opting instead to keep production necessary to meet downstream demand. As Jiangxi Copper Company and Jinlong Company are scheduled for unit maintenance during May, SMM anticipates the average operating rate at domestic copper smelters will likely fall. 
 
2) Refined Copper Stocks at Copper Smelters Inch Higher, Scrap Copper Supply Remains Tight
Refined copper stocks at domestic copper smelters were 78,250 mt last week, up 13,800 mt from SMM's last survey. According to SMM data, spot copper prices averaged at RMB 59,610/mt during April, down RMB 1,632/mt from March. This average price added to losses for smelters and caused them to hold back goods. 

Copper smelters maintained normal copper concentrate stocks last week, with most stocks supplied by long-term copper concentrate contracts. Smelters had little interest in importing copper concentrate, but increased domestic purchases to help cut losses. However, scrap copper supply fell further as copper prices moved lower, leaving scrap copper stocks at copper smelters only enough to maintain production.