SHANGHAI, Sep 16 (SMM) – The average operating rate across Chinese manufacturers of copper rod with copper cathode as feedstock stood at 75.45% in August, up 0.36 percentage point from July but down 5.9 percentage points from August 2018, showed an SMM survey.
Greater demand from wire and cable producers mainly contributed to the gain in operating rates, as they, especially those in east China, needed to fulfill more orders.
Adding to the operating rate gain was weaker operations at rivals—copper scrap users, who ran in losses due to poor price advantage and tight supplies of copper scrap.
The recent, strict environmental probes, subdued production at some medium-sized and small copper rod producers, which drove orders to large producers, helping lift the operating rate from the large plant-intensive SMM survey
The ratio of raw material inventory to monthly output at copper cathode-made rod producers stood at 10.44% in August, down 0.3 percentage point from a month ago, as trade uncertainty between the US and China kept producers cautious.
Operating rates across copper rod producers who use copper cathode as feedstock are expected to rise 1.8 percentage points from August to 77.25% in September, as demand from wire and cable producers further pick up.
Data from China Electricity Council showed that the realised investment in power grid projects in the first seven months of this year shrank 13.9% from the same period last year, smaller than the drop of 19.3% in January-June. Improving investment in power is set to grow demand for wires and cables.