SHANGHAI, May 13 (SMM) – Operations at Chinese manufacturers of flat-rolled copper products slowed in April, as backlogged orders had been fulfilled and as the COVID-19 lockdown restrictions dealt a blow to the demand that have already been weak.
An SMM survey showed that operating rates at Chinese manufacturers of copper sheets, plates, strips and foils averaged 68.3% last month, down 4.77 percentage points from a month ago and 4.86 percentage points from a year ago.
The rush to fulfill orders backlogged due to stringent virus containment measures in China boosted the operating rates in March and led to the month-on-month decline in April, while slower operations compared to a year ago were due to lingering weakness in the automotive and electronics.
Demand losses caused by the coronavirus crisis also dented operations at manufacturers of flat-rolled copper products, and the impact from the pandemic deepens this month.
With a plunge in new orders, the average operating rate at Chinese manufacturers of copper sheets, plates, strips and foils is expected to slip to 64.83% in May, down 3.47 percentage points from April and 14.32 percentage points from May 2019.
Copper rod producer operating rates rose to a record high of 83.29% in April
Compared to the weak flat-rolled sector, orders for copper rods were robust last month on the back of Beijing’s infrastructure push, lifting operating rates at Chinese producers of such products to a record high of 83.29%, according to a separate SMM survey.
April’s average operating rate across Chinese copper rod producers who use copper cathode as feedstock was 23.89 percentage points higher than March and up 5.01 percentage points from the same month of 2019.
Low production of copper rods made from copper scrap also contributed to greater production of rods made from copper cathode.
Given the coronavirus’s shock to exports, the operating rate at copper rod producers is expected to slip to 80.33% in May, to produce a year-over-year decline of 1.37 percentage points.