SMM Copper Survey: Average Operating Rate 71.97% in January

SHANGHAI, Feb. 8 (SMM) – A recent SMM survey of 21 major domestic copper wire rod producers (total capacity: 3.61million mt/yr) revealed the following insights:

1) Average Operating Rate 71.97% in January
The average operating rate during January at the surveyed copper wire rod producers was 71.97%, virtually flat with December's 71.45%, and due largely to the following two reasons. First, although some downstream enterprises began gradually closing for the Chinese New Year holiday, most copper wire rod producers were still operating normally during January. Second, some copper wire rod producers were upbeat about post-holiday consumption and raised output.

Nevertheless, most producers plan to conduct maintenance during the holiday period, so SMM anticipates February's average operating rate will fall sharply to 55.58%.

2) Raw Material Inventories Up Slightly in January
Raw material inventories during January at the surveyed copper wire rod producers were 15.3% of production, up 1.18% MoM. Finished goods inventories were 13.75% of production, also up 4.3% MoM. The marginal increase in raw material stocks was largely attributed to plans to continue production during the Chinese New Year holiday period and since some producers were optimistic toward future copper price trends.

The copper wire rod producers SMM interviewed also increased finished goods inventories in January to ensure both sales and production immediately after the holiday.