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SMM Copper Survey: Average Operating Rate 57.53% in September
Oct 22,2012 11:20CST
smm insight
Source:SMM
SMM's most recent survey of 23 major domestic copper plate, sheet, strip, and foil producers (total capacity: 985,200 mt/yr) yielded the following insights:

SHANGHAI, Oct. 22 (SMM) – SMM's most recent survey of 23 major domestic copper plate, sheet, strip, and foil producers (total capacity: 985,200 mt/yr) yielded the following insights:

1) Average Operating Rate 57.53% in September
The average operating rate during September at copper plate, sheet, strip, and foil producers was 57.53%, virtually flat with August levels. The average operating rate failed to extend August's increase, a sign that copper consumption was still weak and may have not hit bottom. Output of mobile phones, computers, and microcomputers in August were all down by 7.1% YoY, 8.5% YoY, and 7.5% YoY, respectively, but YoY declines slowed from two digits to single digit.

Orders from the cable sector, which consumes 20% of copper plate, sheet and strip, should now show signs of improvement since electrical cable demand is up. However, the US Commerce Department has now concluded anti-dumping and anti-subsidy investigations into Chinese PV exports to the US, and will now impose punitive anti-dumping duties of 18.32%-249.96% and countervailing duties of 14.78%-15.97%, essentially shutting down the US markets to most of Chinese PV producers. This will further depress copper strip demand from the PV sector, and in general, demand for copper plate, sheet, strip, and foil will remain low in the short term.

2) Raw Material Inventories Down Sharply in September
Raw material inventories at the surveyed copper plate, sheet, strip, and foil producers were 24.69% of production in September, down considerably from August's 30.15%. Copper prices rapidly rose above RMB 60,000/mt during September, up from RMB 56,000/mt early in the month, before falling back slightly to RMB 59,000/mt. Extremely high copper prices turned most downstream producers pessimistic and compelled them to consume existing stocks given sluggish downstream orders.
 

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