SHANGHAI, Jan. 29 (SMM) – China's copper markets this year are expected to stage better performance than last year, but when to feel a real turnaround remains to be seen. SMM will hold the 8th Copper-Aluminum Summit during March 19-22, 2013 jointly with the Shanghai Nonferrous Metals Trade Association, analyzing future copper price trend.
Based on the latest SMM survey, the average operating rate during December at copper wire rod produces was 71.45%, and 58.52% at copper plate, sheet, strip and foil producers, down 2.84% and 0.44%, respectively, from the previous month, and considered relatively low levels for the year of 2012.
Nevertheless, the survey showed that these producers become more confident over a pick-up in post-holiday consumption as sales in home appliances and automobiles have improved slowly. Agencies and institutions are also optimistic over future copper prices, citing that downstream consumers will replenish stocks following the Chinese New Year holiday.
However, what's the real situation for the time being? SMM survey found that downstream producers have yet to begin stockpiling in large quantities at least ahead of the holiday, owing to high copper prices at present on one hand and thin orders on the other. Hence, many companies which survived weak markets for more than one year are positive towards the outlook but at the same time dare not formulate active operation strategies hastily.
These companies are mostly concerned with the implementation of government policies. “China has set the general direction of stimulating consumption and driving domestic demand, but the key is how to implement these policies. Anemic terminal demand can not assure orders”, said the manager of a copper wire rod producer. He added, taking home appliances as an example, the policy of home appliances going to the countryside and other related government subsidy policies have been executed for two years. But what are the new stimulus measures has caught the attention from terminal manufacturers, retailers, as well as raw material suppliers. They all wait for clear signals from the government's meetings held in March.