SHANGHAI, Jan. 22 (SMM) – SMM carefully selects three pieces of major copper industry news for you:
Nearly Half of Copper Wire Rod Producers Downbeat about January Orders
According to a latest SMM survey, 48% of copper wire rod producers expect that their January orders will continue decreasing from December.
The surveyed producers anticipate their average operating rate at 64.66% in January, down sharply by 6.79% from December's level. The significant drop is due largely to the fact that some producers are scheduled for unit maintenance owing to pessimism over consumption and arrival of the low demand period.
Approximately 48% of copper wire rod producers are negative about the outlook. First, electric wire and cable producers have seen a low demand season since early January, reducing demand for copper wire rod. Second, as construction for various projects has slowed with the Chinese New Year holiday approaching and weather in north China becoming cold, demand for all kinds of wire and cable has abated. Third, high copper prices and tight credit have depressed copper wire rod demand from downstream consumers.
Weak Spot Chinese Copper Demand ahead of Chinese New Year
Physical copper demand in China is expected to remain slack till March as producers will only resume production following the Chinese New Year holiday. Traders said that although recent manufacturing data and export data posted strong performance, downstream producers will still scale back or suspend operations during the holiday, similar to situations in past years.
Downstream companies consuming copper will slash their sale volumes in the next three weeks. These producers have been purchasing copper on an as-needed basis and will make replenishments following the holiday as their raw material inventories decrease gradually, a trader told SMM.
Copper consumers take caution ahead of the Chinese New Year holiday, and are unlikely to step up purchase volumes until March, an international trading company said.
Freeport and Jiangxi Copper Set 2013 TC/RC 10.2% Higher
According to sources, Jiangxi Copper and global ore supplier Freeport-McMoRan Copper & Gold Inc have settled TC/RC for 2013 term copper concentrate contracts at USD 70/mt (cents 7/lb), up 10.2% from USD 63.5/mt (cents 6.35/lb) in 2012. This reflects recovery in copper ore supply.
However, Jiangxi Copper failed to reach an agreement with BHP Billiton on TC/RC for 2013, with the latter quoting at USD 68/mt (cents 6.8/lb).