SHANGHAI, Jul. 10 (SMM) – Operating rates at Chinese copper wire rod makers averaged 71.09% in June, down marginally from May’s 70.80%, the most recent SMM survey showed.

SMM surveyed 21 copper wire rod producers representing 4.07 million tpy in total capacity.

Some producers indicated that they were only accepting orders from customers they felt could pay on time due to growing mid-year financial pressures.

Meanwhile, cooler weather in many regions across China has dampened air condition demand, cutting into orders for new compressors. This has left some copper wire rod makers concerned over a possible decline in orders from the enameled wire market.

Demand for copper wire rod from the power cable sector has also waned as economic restructuring in China has hit demand for power cable from real-estate and energy-intensive sectors. Given the combination of these factors, copper wire rod producer operating rate failed to rise sharply in June.

Some producers indicated that they expect the government to loosen investment controls slightly heading into July as projects representing larger demand and that have already been approved will be required to accelerate schedules or risk losing their approvals. This shift in policy stance may water down the impact of the Q3 low-demand season. SMM thus expects the average operating rate at copper wire rod makers to hold steady near 70.38% this month.