[SMM Analysis] Copper futures prices fell, scrap copper consumption was limited, and the start-up rate of refined copper rod enterprises rebounded in May compared with the previous month.

SMM, June 11-according to SMM survey data, the operating rate of refined copper rod-making enterprises in May was 81.70 percent, an increase of 1.28 percentage points from the same period last year and 3.42 percentage points from the previous month.

In May, refined copper rod-making enterprises rose compared with the same period last year, mainly due to the effect of capacity concentration, and the effect of capacity concentration in the copper rod market was obvious. At present, the major copper rod factories are still in the process of capacity expansion. More orders from small and medium-sized enterprises flow to large and medium-sized copper rod factories, SMM research enterprises are mostly large and medium-sized enterprises, so the output performance is better.

The start-up rate of refined copper rod enterprises rose in May compared with the previous month, due to: first, terminal demand is still warming: consumption recovery is slow this year, photovoltaic, offshore wind power, UHV, communications cables and other orders performed better. 2. Consumption of some refined copper instead of scrap copper: in May, the average monthly price difference of refined copper is 831 yuan / ton, the price of refined copper has dropped, scrap copper has lost its price advantage, and at the same time, the supply of scrap copper enterprises has been reduced, and the sentiment of cherishing and selling has warmed up. Therefore, the market chooses more refined copper as raw materials to replace scrap copper consumption. Third, copper prices fell, orders increased: copper prices fell in the late May Day, terminal enterprise orders increased, boosting the pace of production of copper rod enterprises. It is worth noting that some of the orders were placed by terminals at low prices in advance and were not picked up in May, and prices continued to fall, and downstream orders were cautious by the end of May.

In May, the raw material inventory ratio of refined copper rod making enterprises was 10.91%, 0.44 percentage points lower than the same period last year and 0.59 percentage points lower than the previous month. The decline of raw material inventory was mainly due to the increase of operation rate and raw material consumption in May. At the same time, the price of copper fell in May and the purchase of electrolytic copper increased at low prices.

It is expected that the operating rate of refined copper rod-making enterprises in June is 81. 73%, basically the same as last month. In June, most of the enterprises said that the orders were relatively stable, and the orders in June were expected to be the same as those in May. Most of the large enterprises were long orders, and the production situation was stable. A small number of companies said orders fell in June, as consumption gradually entered the off-season, the subsequent start-up rate is expected to show a downward trend.