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[SMM analysis] the best-selling rate of scrap copper rods at low prices has climbed to the peak season level.
Jul 12,2020 18:58CST
The content below was translated by Tencent automatically for reference.

SMM7, March 12:

According to SMM survey data, the operating rate of scrap copper rod enterprises was 66.71% in June, a sharp increase of 23.08% from the previous month and 18.91% from the same period last year.

Copper prices continued to rise, which was conducive to the outflow of scrap copper, as well as the gradual relaxation of epidemic control in overseas areas from the end of April to May. Importers began to increase their orders, and raw materials such as scrap copper and copper ingots gradually entered the country to make up for the shortage of scrap copper supply. the shortage of raw material supply in waste copper rod enterprises has been alleviated again. Some of the established brands or powerful manufacturers who have been ploughed deeply in the scrap copper industry for many years have more abundant raw material channels. Under the condition of low product price and sales, the production capacity is running with high load, so as to further reduce the average cost and expand the competitive advantage. The overall operating rate of the scrap copper rod industry has rebounded to the peak season level of previous years.

According to a survey by SMM, the operating rate of scrap copper rod enterprises is expected to be 70.12% in July, up 3.41% from the previous month, and 19.41% higher than the same period last year.

After the copper price strongly broke through the 50, 000 mark in July, the scrap copper rod in the main scrap copper rod production areas in China, including tax, has fully deducted more than 1000 yuan / ton from the monthly contract of Shanghai copper, even if the high copper price will restrain the demand for copper downstream. However, scrap copper rods, which are much cheaper than refined copper rods, are favored, and orders are maintained well and continue to boost the operating rate. According to SMM, there are still scrap copper rod manufacturers to resume production in July, coupled with the continued release of production capacity of large enterprises, it is expected that the overall operating rate should rise slightly again.

The main thing that restricts the overall operating rate is that the supply of raw materials is not loose, some manufacturers are unable to open multiple production lines for a long time, the supply of superimposed scrap copper increases hugely, and product prices rise slowly under fierce competition. some manufacturers take the initiative to maintain part of the capacity operation, more willing to hold raw materials, profit or more.


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