Operating Rate at Chinese Copper Wire Rod Makers Falls to 71.73% in October 2014

SHANGHAI, Nov. 12 (SMM) – Operating rates at major Chinese copper wire rod producers averaged 71.73% in October, down 1.63 percentage points on the month and 3.03 percentage points year-on-year, the most recent SMM survey indicates.

The weeklong holiday in early October only partially explains the lower operating rate.

Another factor was that producers – still plagued by their own tight finances – increasingly rejected orders from buyers with poor payment records and required more orders to be paid in cash. The resultant decline in orders further dampened production.

As wire & cable, and enameled wire bids will be solicited by rail and power grid projects, copper wire rod consumption is expected to grow in the fourth quarter. Many producers are expected to step up production this quarter to meet annual output targets. As such, SMM expects the average operating rate for November to rise to 72.62%.

SMM surveyed 21 Chinese copper wire rod producers in October, covering 4.07 million tpy in total capacity.