Rising Copper Rod Operating Rate in China Masks Weak Copper Consumption, SMM Says

SHANGHAI, Apr. 25 (SMM) – Copper consumption by copper rod industry, the biggest contributor to consumption of the red metal, was not strong, despite big increase in copper rod capacity utilization rate, SMM survey found. 

SMM’s survey of 22 copper rod producers in China, with capacity totaling 5.12 million tonnes, showed their average operating rate jumped 15.12 percentage points from February to 69.35% in March and will climb further to 70.01% in April.

On a year-on-year basis, however, the operating rate was down 5.9 percentage points in March and continued falling in April.

Copper rod producers showed interest in buying copper cathode against big volatility in copper prices, weak downstream demand, as well as widening price spread between copper cathode and copper scrap, SMM learned.

Market conditions were not optimistic in April. Producers in the survey sample said orders dropped compared with the same period last year as a result of rapid expansions in the industry. About 23% of those surveyed expect orders to improve in anticipation of the peak-demand season. Another 64% expect orders in April to change little from March. Large producers, most of whom signed long-term orders, reported stable demand. The rest 13% are pessimistic over production in April, citing financial pressure and unit maintenance as main reasons.

For news cooperation, please contact us by email: sallyzhang@smm.cn or service.en@smm.cn.