SMM Copper Survey: Average Operating Rate Down in December

SHANGHAI, Jan. 14 (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 Down in December
The average operating rate during December at the surveyed copper wire rod produces fell to 71.45%, a loss of 2.84% MoM, and was due to three major factors. First, these surveyed producers faced tightening credit during December, which caused them to scale back production. Second, copper wire and cable orders during December fell from November due to soft demand. Third, improvements in enameled wire demand experienced during November did not extend into December.

Some producers now plan to suspend production for unit maintenance, so SMM expects the average operating rate at the surveyed producers to fall further in January.

2) Copper Wire Rod Producers Show Little Interest in Stockpiling
Raw material stocks during December at the surveyed producers were 14.12% of production, up only 0.14% from November’s 13.98% and still considered low. Most producers say they slashed raw material stocks due to tight cash flows, while the lack of clear copper price trends also forced producers to lower stock levels.