Re-opening Overview of Copper Cathode Rod Industry Post CNY Holiday

SHANGHAI, Feb 2 (SMM) - According to the feedback from the 18 copper cathode rod producers in SMM sample, the earliest re-opening date was January 25, and the latest was mid-to-late February. Most large enterprises already resumed the operation before January 30. 

Generally speaking, most copper cathode rod producers resumed the production as early as in the previous years with only a few exceptions. According to the survey, some copper rod enterprises saw an accumulation of finished product inventory post the Chinese New Year (CNY) holiday, as they were unable to digest the stocks they piled up before the holiday when downstream demand did not fully recover amid high copper prices.

In fact, 6 of the 18 sample enterprises reported high inventory of finished products. But it is not a big deal for some companies as they planned to extend the holiday, so the sufficient finished product inventory was beneficial to smooth delivery.

In terms of consumption, with the re-opening of large cable and wire companies, copper rod companies also began to deliver goods, but in small amount.

On the one hand, the copper prices stayed elevated after the holiday, which discouraged downstream buyers from purchasing.

On the other hand, most of the small and medium-sized downstream enterprises producing cable, wire and enamelled wire have not resumed normal production. Hence, the demand for copper rods has not returned to normal levels. A copper rod company said that their orders recovered significantly since January 31. 

The demand from cable and wire sectors, especially for wires used in home renovation, has picked up substantially. At the same time, many cable, wire and cathode copper rod producers said that the end user consumption will not improve aggressively until mid-February, but they have optimistic expectations for this year's consumption and look forward to the launch of projects boosting real estate and infrastructure construction sectors. Some companies said that they were gearing up for a demand boom.  

On the whole, the downstream demand has not yet returned to normal so far, and the production pace of copper cathode rod enterprises is not fast. It is expected that the downstream enterprises will fully resume normal production around February 5. Before then, the operating rates of the copper cathode rod industry will gradually pick up.