China Cu Apparent Consumption Data Analysis in July 2012

SHANGHAI, Aug. 27 (SMM) –

Refined Copper
Apparent consumption of refined copper in July was 724,800 mt, down slightly by 7,800 mt MoM. Apparent consumption of copper semis in June fell significantly by 283,500 mt, a sign of increasing domestic refined copper inventory pressures. Since apparent consumption of refined copper was higher than actual consumption during July, refined copper inventories at bonded warehouses again rose above 500,000 mt. However, domestic inventory pressures eased somewhat as copper smelters conducted unit maintenance and scaled back production. It was worth noticing that apparent consumption of refined copper reached as high as 5.3342 million mt during the period January to July, up over 25% YoY, and far above the single-digit YoY growth rate for apparent consumption of copper semis. As a result, high copper inventories will continue to restrict copper price gains in the near term.  

Copper Semis
July is the traditionally low demand period for copper, so operating rates at copper tube/pipe producers fell sharply, while demand for copper plate, sheet, strip, and foil was also depressed since exports of finished goods such as home appliances were also down. Operating rates at copper wire rod producers also remained low due to weak wire and cable consumption. In this context, copper semis output in July fell below 1 million mt. According to an SMM survey, operating rates at wire and cable producers during August have risen since existing orders were processed and should now drive up copper wire rod demand. As a result, SMM believes apparent consumption of copper semis will rebound in August.