SHANGHAI, May 12(SMM) - Operating rate at copper cathode rod producers stood at 54.68% in April, down 11.48% on the month and 15.91% on the year, SMM showed. The average operating rates of large, medium and small-sized enterprises were 55.67%, 52.22% and 58.94% respectively. (Note: SMM surveyed 46 producers with a total production capacity of 12.40 million mt)
Operating rate at copper cathode rod producers dropped sharply in April, hitting a year-on-year record low since 2016. The recurred pandemic in April made a great impact on the production and sales of the copper cathode rod industry. As Shanghai was in a lockdown since April, the transport of copper cathode was directly affected, as well as the procurement of copper cathode at the copper rod producers in Jiangsu and Zhejiang. The raw material inventory of enterprises was almost depleted, resulting in the reduction and suspension at many large copper rod producers in Yixing and Changzhou, dragging down a sharp drop in operating rates at the copper rod producers. Although the pandemic made less impact on copper rod producers in south and north China, the producers were also faced with restrictions in shipment and rising cost in production and transportation, pulling down the copper consumption and the performance of copper cathode rod industry. From the research, the demands in terminal infrastructure, real estate, home appliances and automobiles were less than expected, and the high prices of copper dragged down the downstream purchasing enthusiasm. The lasting impact of pandemic on consumption resulted in a significant drop in the opening rates of the copper cathode rod industry in April.
Raw material inventory/output ratio of copper cathode rod producers stood at 8.51% in April.
Raw material inventory/output ratio of copper cathode rod producers stood at 8.51% in April, an increase of 3.43% on the month. The increase was mainly due to the recovery of the transport of copper cathode spot in Shanghai, which supplemented raw material inventory at copper rod enterprises.
Average operating rate of copper cathode rod producers is expected to be 63.03% in May.
Average operating rate of copper cathode rod producers is expected to be 63.03% in May, up 8.35% on the month. But the year-on-year operating rate was still low, which was hard to return to the normal level. On the one hand, more copper rod enterprises took off for the May Day holiday and the time was longer compared to previous years, which may lower the operating rates. On the other hand, although the pandemic in Shanghai in May has eased and the logistics improved, the poor consumption caused by the pandemic was uneasy to pull up. Orders in downstream cable and enamelled wire industry were not ideal. Copper cathode rod producers were pessimistic about the consumption in May.
