SHANGHAI, Dec 15 (SMM)—Shipments of copper cathode from Guangdong warehouses reached 97,000 mt, a year-on-year increase of 30.2% and a month-on-month increase of 42.2%, as downstream sectors recovered.
Operating rates at copper rod enterprises using copper cathode as feedstock continued to rise. Operating rates in south China stood at 73.6% in October, and climbed further to 81.8 in November. The rush to produce at the end of the year and a narrower price spread on processing fees between copper rods produced with copper cathode and with copper scrap prompted downstream producers to increase stockpiling for copper rods produced with copper cathode.
Operating rates at copper tube enterprises continued to rise. Driven by the peak season for air-conditioner and brisk export orders, orders of air-conditioners, but refrigerators and washing machines have increased noticeably on the year. This has bolstered orders at copper tube producers. Operating rates at large scale copper tube companies has exceeded 90%.
Operating rates at copper bar, plate and strip producers have also recovered to over 85%. Orders at many companies have been scheduled to January, with supply falling short of demand. Have Finished product inventory at some companies has almost been fully taken.
Shipments are likely to remain high in view of high operating rates at downstream sectors. On the other hand, a large volume of secondary copper has arrived at the port of Guangdong due to the new policy on the import of secondary copper effective on November 1. Around 10,000 mt of cargoes have arrived at the port. But the current customs clearance speed is slow, as inspections are undertaken for almost each container, and the average clearance period is around 15-20 days. The impact on copper cathode demand is unlikely to be significant unless a large quantity of secondary copper flows into the domestic market. Shipments of copper cathode in December are likely to stand slightly below November.
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