SHANGHAI, Jan. 15 (SMM) – With regard to orders for January, the latest SMM survey of Chinese copper wire rod producers yielded the following insights:
These surveyed producers expect their average operating rate at 64.66% in January, down sharply by 6.79% from December, largely pointing to slack consumption during the sluggish demand period which forces them to suspend production for unit maintenance.
The survey revealed that 48% of the surveyed copper wire rod producers anticipate January orders to drop from December. In their views, electric wire and cable producers will gradually enter low demand period in January, reducing demand for copper wire rod. Besides, with approaching of the Chinese New Year holiday and bad weather in north China, construction of various projects has slowed, depressing copper wire rod demand. Relatively high prices and tight cash flows have also capped downstream demand.
Roughly 47% of these producers see flat orders in January as they mainly provide stable long-term copper wire rod contracts to companies or groups for internal use.
The remaining 5% of copper wire rod producers SMM contacted are upbeat about the outlook. They said producers generally concentrated on the return of funds in December, which negatively affected orders. But copper wire rod orders should recover from low levels in January.