SHANGHAI, Oct. 27 (SMM) – The average operating rate at Chinese copper smelters increased 3.78 percentage points in September to 94.93%, the highest so far this year, SMM’s survey of 23 smelters shows.
The average price of refined copper was only 49,464 yuan per tonne in September, far below the 50,341 yuan per tonne in August. However, smelters kept high operating rates as they could still earn from high spot TCs for copper concentrate and as some needed to speed up production to meet production targets. Yunnan
Copper’s Chifeng Smelter and Baiyin Nonferrous Metals both resumed from maintenance cycles, also contributing to the rising operating rate.
Copper premiums in China’s physical markets declined 29 yuan per tonne on the month in September and are unlikely to rise noticeably in October. In addition, China’s PPI, CPI and electricity consumption all indicated weak demand, while M2 growth in September missed forecast, meaning liquidity conditions were not as good as market had anticipated. In this context, copper demand may fall short of supply, foreshadowing a rise in copper stocks at smelters.