China's unwrought copper and copper product imports 6% lower in 2019

Orders at copper rod companies using copper cathode as feedstock have been weak after the Qingming Festival holidays. Orders from enamelled wire producers decreased sharply as SHFE copper prices exceeded 68,000 yuan/mt market on Thursday. This together with weak demand from wires and cables has intensified pressure for copper rod plants.

According to SMM statistics, copper semis output in March stood at 1.84 million mt. The cumulative output from January to March was 4.49 million mt, an increase of 2.48% year-on-year due to a low base in the same period last year. Operating rates at copper semis producers stood at 73.03% in March, an increase of 20.73 percentage points from the previous month, compared to an expected rise of 3.65 percentage points, and an increase of 8.82 percentage points year on year.

Copper rod consumption was promising in April in the SMM survey conducted before the Qingming Festival holiday on copper rod producers using copper cathode as raw material, driven by improved consumption from power grids and the release of demand from wire and cables. However, orders have been unexpectedly weak after the Qingming Festival holiday.

Orders at cable companies have gradually picked up last week. Boosted by the start of infrastructure projects and other projects, orders at cable companies have recovered nearly 80%. Although the northern market has recovered slowly, many cable companies have recently received orders from the State Grid. With the depletion of downstream inventories and consumption improvement, orders for wire and cable companies are expected to increase after the Qingming Festival.

Operating rates at copper rods plants using copper cathode as raw material have remained low against high copper prices. Some companies have faced significant pressure from high inventory of finished products. Copper rod processing companies using copper cathode as raw material told SMM that orders did not improve in the low month of March.

Downstream cable companies have placed orders moderately amid price volatility previously. Weak copper demand resulted in slow delivery-taking, accumulating inventory of raw material or finished products at producers. That increased cash pressure at copper rod plants using secondary copper as feedstock, affecting secondary copper suppliers. Secondary copper suppliers have sold aggressively and collected payments to ease cash flow issues.

Orders  continued to pick up last week along with improved orders at electric wire and cable and enamelled wire. Overall consumption of copper rods produced with copper cathode was strong last week but some enterprises saw poor orders. Copper prices exceeded 65,000 yuan/mt with big volatility, keeping most downstream buyers purchasing as required.

Operating rates did not rise sharply as higher costs driven by copper price gains post-CNY holidays shrank profits. Companies reported limited new orders even as copper prices continued to fall last week. New engineering projects have been low post-CNY holidays, while some of the enterprises remaining in operations were ending construction of projects scheduled for the end of last year, lowering purchases of cables significantly. However, with the stability of copper prices and the increase in engineering projects in late March, operating rates at cable companies are expected to recover to around 70%.

China’s imports of copper ore and concentrate continued to decline in June, falling to 1.59 million mt from 1.69 million mt in May, according to China customs data released on Tuesday. Imports in the first half of the year, however, remained 3% higher year on year. 

Exports of refined manganese, which contain unwrought manganese, scrap, and powder, were up 23.07% from Aug