The average operating rate of copper rod plants using copper scrap was 62.62% between April 22 and April 28, a gain of 4.35 percentage points from a week earlier, according to SMM survey of 15 plants with a capacity of 1.48 million mt/year. It was difficult for copper rod plants using copper scrap to purchase raw materials as sellers held back their cargoes amid plunging copper prices. Some plants said that they had been unable to obtain raw materials for three consecutive days, and some will be forced to shut down during the Labour Day holidays due to raw material shortages.
New orders for copper rod produced with copper scrap surged at the beginning of last week. With the sharp drop in copper prices in the middle of the week, quotes of copper rod produced with copper scrap exceeded prices of SHFE front-month copper. The price spread between copper rod produced with copper cathode and with copper scrap shrank to a minimum of 400 yuan/mt. The absence of economic advantage combined with wire and cable plants fearing further price declines weakened new orders of copper rod produced with copper scrap at the week’s end. Downstream buying interest decreased.
As of April 28, copper rod produced with copper scrap in Jiangxi was quoted with a discount of 10 yuan/mt against SHFE front-month copper contract prices. Electric copper rod in east China was quoted with premiums of 595 yuan/mt over the contract. The price spread between copper cathode rod and copper rod produced with copper scrap narrowed 485 yuan/mt from April 21 to 605 yuan/mt. The fading economic advantage dented consumption of copper rod produced with copper scrap.
