New Orders For Copper Rods Produced With Copper Scrap Weakened Despite Wider Price Spread

The operating rates of copper rod plants using copper scrap were 45.96% between June 3 and June 9, a rise of 2.75 percentage points from a week earlier, according to SMM survey of 15 plants with a capacity of 1.48 million mt/year). Increased supply of copper scrap accounted for the higher operating rates last week. Raw material inventories of most copper rod factories using copper scrap returned to the safe inventory level.

On the demand side, despite strong economics of copper rod produced with copper scrap, the high absolute prices kept downstream small and medium-sized wire and cable factories on the sidelines. Therefore, orders for copper rod produced with copper scrap dropped significantly from the previous week.

As of last Friday, copper rod produced with copper scrap in Jiangxi was quoted with a discount of 545 yuan/mt against SHFE front-month copper contract prices. Electric copper rod in east China was quoted with premiums of 865 yuan/mt over the contract, with a price spread of 1,410 yuan/mt between copper rod produced with copper cathode and copper rod produced with copper scrap.