The operating rates of copper rod plants using copper scrap were 38.43% between October 23 and October 26, a gain of 3.89 percentage points from a week earlier, according to SMM survey of 15 plants with a capacity of 1.48 million mt/year). The weekly average price spread between copper rod produced with copper cathode and with copper scrap stood at 471 yuan/mt, an increase of 269 yuan/mt from a week earlier. This to a certain extent boosted the consumption of copper rod produced with copper scrap. The copper rod plants using copper scrap as raw material in north China resumed normal production.
Copper scrap supply improved driven by rising copper prices. According to SMM survey, raw material inventories at most of the copper rod factories using copper scrap were only sufficient to eke out continuous production for 2-3 days.
Copper rod plants using copper scrap as raw material still reported poor downstream consumption, and daily shipments were much lower than before. A few plants said that downstream companies immediately stopped purchasing as soon as the price of copper rods increased last week. The lack of cost efficiency depressed downstream demand for copper rod produced with copper scrap.
This week, if the price of copper continues last week's upward trend driven by the growth in downstream demand, the price spread between copper cathode and copper scrap will further expand, which will improve demand for copper rod produced with copper scrap. But difficulties faced with copper rod plants using copper scrap as raw material can hardly improve in the short term.