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SMM Copper Survey: Average Operating Rate 69.02% in October

iconNov 12, 2012 10:49
Source:SMM
A recent SMM survey of 21 major domestic copper wire rod producers (total capacity: 3.5 million mt/yr) revealed the following insights:

SHANGHAI, Nov. 12 (SMM) – A recent SMM survey of 21 major domestic copper wire rod producers (total capacity: 3.5 million mt/yr) revealed the following insights:

1) Average Operating Rate 69.02% in October
The average operating rate during October at the surveyed copper wire rod producers was 69.02%, down 2.33% MoM and 14.44% YoY, and due partly to the extended holiday period for China's National Day. Besides, although some downstream producers chose to replenish stocks at lows following copper price declines in late October, orders for power cables were down and lowered the average operating rate. In addition, one large copper wire rod producer conducted maintenance during October, which also contributed to a lower average rate.

2) Copper Wire Rod Producers Cautious Toward Raw Material Inventories, Finished Goods Inventories Up
Raw material inventories during October at the surveyed copper wire rod producers were 16.02% of production, down from the previous month's 17.21%. Despite continuous copper price declines during October, copper wire rod producers were not replenishing raw material stocks in large quantities, even at lower price levels. Most producers pointed to the uncertain international economic environment and the lack of clear copper price trends for not building stocks, which would also increase cash flow pressure and cut into profits.

Finished goods inventories during October at the surveyed producers increased to 15.80% of production, up from 5.58% in September. The increase was largely contributable to the fact that a large producer prepared for maintenance and needed to ensure finished goods stocks.

 

copper wire rod
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