SHANGHAI, Dec 14 (SMM) – The average operating rate across Chinese copper rod producers that use scrap with raw materials fell 2.17 percentage points month on month to stand at 59.37% in November, SMM data showed.
Weaker demand accounted for the decline in operating rates in November. Increasingly colder weather shrank infrastructure construction starts in the north, while weak consumption grew inventories of finished goods across manufacturers of wire and cable, resulting in a substantial decline in orders for copper rods.
High prices of copper scrap also eroded production enthusiasm across scrap-using copper rod producers. The price spreads between copper cathode and copper scrap narrowed as copper prices slid. Copper scrap sellers held their offers firm.
In December, operating rates across scrap-using copper rod producers are expected to extend their decline to 58.18%.
With the government’s robust environmental-protection drive, scrap-using copper rod producer continue to face pressure. For raw materials, tighter grips over waste imports reduced supplies of copper scrap and kept prices at highs.