SHANGHAI, Oct 21 (SMM) – After the National Day holiday, Guangdong’s power rationing has eased significantly, and most copper processing companies have been able to resume normal production. However, the unexpected rise in copper prices has become a major obstacle to the recovery of the operating rate of copper processing enterprises and the recovery of copper consumption.
Industrial users across cities and counties in the Pearl River Delta region, like Guangzhou, Shenzhen, Dongguan, Foshan, Zhongshan, Qingyuan, Zhaoqing, Zhuhai and even Shantou as well as Jieyang, have undergone the power rationing since September 16. Most copper companies have been notified to implement the 4-on 3-off shift schedule. And several areas have gone so far as to operate 1-on 6-off. Specifically: to stop all production and operational power supply from 8:00 am to 11:00 pm.
Many companies halted production for the National Day holidays, and that significantly reduced electricity consumption in various parts of Guangdong. Therefore, most areas did not implement power rationing during the National Day holidays. And only a short-term off-peak power consumption measure was implemented.
As various industries continue to resume normal production, power rationing is still implemented in various places after the National Day holidays. But the intensity of power rationing has eased noticeably than before the National Day. The previous four-on three-off shift is no longer implemented. The power rationing is implemented for only one day a week or not implemented at all.
Copper rod industry: While a few copper rod factories are still affected by the power rationing, most of the copper rod companies have not been affected by the power rationing since after the National Day holidays. The operating rate rose between October 8 and October 14. However, the sharp increase in copper prices caused the price difference between copper cathode rods and copper scrap rod to rapidly widen to 2,400 yuan/mt. This hampered the sales of copper cathode rod. The operating rate of copper cathode rod industry has dropped significantly since October 15. The power rationing is no longer the reason that affects the operating rate of copper rod, as opposed to the price spread between copper cathode and copper scrap.
Copper tube industry: After the National Day, a large number of copper tube companies were not affected by the power rationing. Only copper tube companies in a few areas were still affected, which are expected to cut output by 10-20% in October due to power rationing. However, due to a certain degree of decline in orders from the home appliance industry in October, most companies said that even if there is no impact of power rationing, their operating rate and copper consumption will not increase significantly compared with September.
Copper plate, strip and foil industry: The power rationing after the National Day has also slowed, but according to most copper plate and strip companies, the overall operating rate and copper consumption in October will decline compared with September, mainly due to the National Day holidays and the recent copper price increase, resulting in a sharp drop in downstream orders.
