SHANGHAI, Dec. 10 (SMM) – A recent SMM survey of 21 major domestic copper wire rod producers (total capacity: 3.67 million mt/yr) revealed the following insights:
1) Average Operating Rate Increases to 74.29% in November
The average operating rate during November at the surveyed copper wire rod producers rose to 74.29%, finally shaking off the negative impact from China’s National Holiday, but the rate was still below the average for the same period last year. According to SMM sources, demand for wire used by the power generation and construction sectors has increased as the year’s end nears. Consumption of enameled wires has also improved, helping boost the average operating rate.
2) Raw Material and Finished Goods Inventories Fall in November
During November, raw material inventories at the surveyed producers were 13.98% of production, down 2.04% MoM. Most producers did not foresee the latest round of price rebounds during December, and along with tight cash flows at the year’s end, buyers turned cautious towards building stocks. Most of these producers do not believe the price increases are sustainable, and exhibit inadequate interest in stockpiling. Hence, raw materials inventories are still expected to remain at low levels during December.
Finished goods inventories during November at the surveyed copper wire rod producers were also down due to increasing downstream demand. Some producers also increased sales to improve cash flows.