Operating Rates of Copper Cathode Rod Enterprises Fell Short of Expectations in September due to High Spot Copper Premiums and Holiday Factor

SHANGHAI, Oct 14 (SMM) - According to SMM survey, the operating rates of copper cathode rod enterprises averaged 73.84% in September, a decrease of 0.6 percentage point MoM, but an increase of 2.01 percentage points YoY. The operating rates of large, medium-sized and small enterprises were 78.28%, 68.28% and 64.82% respectively. Note: SMM surveyed 53 producers with a combined capacity of 12.87 million mt.

The year-on-year rebound was mainly due to the low base in the same period last year caused by power rationing in many parts of China. The operating rates fell short of expectations. Orders from downstream wire and cable plants improved, but the demand from enamelled wire plants was poor. In addition, the spot premiums of copper cathode remained high in September, which also restrained consumption to a certain extent. Many copper rod factories carried out maintenance during the Mid-Autumn Festival, which dragged down the industry's operating rate.

The operating rates are estimated to average 72.56% in October, down 1.28 percentage points month on month but up 5.99 percentage points year on year. Many copper rod enterprises in south China undertook maintenance during the National Day holiday. The extremely wide price gap between SHFE copper contracts after the holiday turned copper rod enterprises cautious about taking orders.