The production rate was up 2.13% month-on-month and 5.46% year-on-year, according to the SMM survey of 21 makers, with capacities totaling 980,000 tonnes. Improving sales encouraged downstream consumers to build stocks when copper prices were around 50,000 yuan per tonne. Some copper semis traders that expected copper prices to gain after spot prices fell by nearly 1,000 yuan per tonne also embarked on building stocks. 

 

Consumption of electronic copper and automotive strips outstripped that of other copper semis products in November. The China Association of Automobile Manufacturers reported that China’s automobile output hit a record high in November of 2.13 million vehicles, up 11.39% month-on-month and 21.17% year-on-year. China’s exports also hit a high for the year, which prompted copper semis users to restock inventories at low prices. The growing demand then encouraged copper plate, sheet, strip and foil producers to increase output. SMM expects stable orders to keep the average operating rate in December at 64.11%. 

 

The survey also showed the proportion of raw material stocks to finished goods at producers grew by 3.26% month-on-month in November to 23.82%, after end-users increased orders as copper prices fell. The average SMM spot copper price in November fell by about 1,000 yuan per tonne month-on-month to 51,157 yuan per tonne. Some end consumers increased purchases when copper prices were near 50,000 yuan per tonne, which allowed copper plate, sheet, strip, and foil makers to build raw material stocks at lower prices. However, since liquidity remained tight, many copper semis producers were unwilling to build significant stocks without new orders. 

 

In addition, the usage of scrap copper at the participants also increased to 17.49% in November, up 1.28% from October’s. The price difference between refined and scrap copper expanded slightly in November. This, combined with tight year-end liquidity, made scrap cargo-holders willing to move goods, improving market liquidity. However, copper semis producers remained wary of building up stocks and preferred to make purchases on an as-needed basis, preventing the consumption of scrap copper from rising significantly.