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Operating Rates Higher at Major Domestic Copper Smelters

China April Copper Imports Data Analysis

SHANGHAI, May 31 (SMM) --
A recent SMM survey of 22 major domestic copper smelters (total capacity: 4.098 million mt) revealed the following insights:
1) Operating Rates Higher&nbsp; 
Based on a recent SMM survey, the average operating rate at 22 major domestic copper smelters was 92.92% in May, up from 86.84% in April.&nbsp; Operating rates at large producers were stable and up slightly.&nbsp; Medium-size producers saw significant improvements in operating rates, as some copper smelters with scrap copper as raw materials were eager to make purchases when copper prices fell, pushing up overall operating rates.&nbsp; Operating rates at smaller producers were flat with previous levels.&nbsp; In addition, 6 of 22 producers surveyed told SMM they would be conducting regular unit maintenance sometime between June and September.&nbsp; In this context, SMM believes China's output of refined copper will fall during this period.&nbsp;&nbsp;
2) Refined Copper Inventories Fall, Raw Material Stocks Normal, Raw Material Supply Tightens&nbsp; 
The SMM survey also shows refined copper inventories at the 22 copper smelters were 28,050 mt in May, down 3,360 mt from 31,410 mt in April.&nbsp; Although copper smelters were unwilling to sell goods in view of depressed prices, actual sales volumes did not decline due to time limits for contract deliveries and high spot premiums.&nbsp; In addition, producers in the survey told SMM that existing stocks of raw materials were sufficient for normal production.&nbsp; However, spot TC/RC for copper concentrate was only between USD 5/mt (0.5 cents/lbs) and USD 10/mt (1.0 cents/lbs), and prices of scrap copper were firmer than refined copper, leaving supply of raw materials tight.
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