SHANGHAI, Mar 31 (SMM)—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. The company said that the current orders are mainly from enamelled wire sector, and both production and sales have fallen sharply by over 25%. In addition to the impact from copper rods produced with secondary copper, weak demand from the power sector also accounted for the decline.
Consumption of secondary copper rods was also poor. Subdued shipments of secondary copper rods last week have pushed up overall inventory level. Consumption in the north recovered slowly as downstream buyers refrained from placing orders. Prices of secondary copper rods were low due to participation of traders in trades. Producers refrained from selling at lower prices, accumulating inventories significantly.
The current operations at wire and cable producers are recovering slowly. Orders from power orders were poor this month amid sharp declines in orders from State Grid and China Southern Power Grid compared with previous years. However, a warmer weather combined with infrastructure and real estate returning to normal construction will improve demand. This coupled with stock depletion at downstream buyers will turn purchases to normal. Consumption from the power industry is expected to improve in April.
