SHANGHAI, Sept. 5 (SMM) – The latest SMM survey of major domestic copper wire rod producers revealed the following insights with regard to their orders in September.

Based on the survey, SMM expects the average operating rate at these copper wire rod producers will increase slightly to 75.17% in September.

68% of the copper wire rod producers SMM surveyed see no major change in September's orders. It was worth noting that most of these producers believed orders improved marginally in August, driven by rising demand for electric wire and cable. But there is little chance demand will improve further in September, as the sluggish real estate market has restricted wire and cable used in construction and home appliances.

18% of these producers are optimistic over the outlook. Copper wire rod orders were relatively stable when copper prices hovered around RMB 55,000/mt in earlier and middle of August. However, downstream producers were hesitant to place orders in late August when copper prices swung between gains and losses owing to the market news front. These producers said that, when the impact from the news front fades, copper prices will get back to previous fluctuating range, which will help boost orders. Some of these copper wire rod producers held the view that demand for copper wire rod will increase marginally after downstream producers resume production during September. Besides, the government may later introduce some stimulus measures on power network, a favorable factor for copper wire rod consumption.

The remaining 14% of copper wire rod producers expect their orders to decrease in September, pointing to severe competition in the copper wire rod industry and high selling pressures incurred. Furthermore, some large copper rod expansion projects have gradually entered operations, which will cut their market shares.