The operating rates of copper rod plants using copper scrap were 60.15% between March 25 and March 31, a drop of 1.49 percentage points from a week earlier, according to SMM survey of 15 plants with a capacity of 1.48 million mt/year.
Last week, risk aversion continued to ease, and copper prices rallied further. But the consumption of copper rods produced with copper scrap weakened from the week prior. Most of the downstream products of copper rod produced with copper scrap are civilian wires and cables.
However, due to the slow recovery of real estate consumption, the demand for copper rod produced with copper scrap has been relatively limited. In addition, wire and cable factories restocked actively on the dip in mid-March. Combined with high copper prices last week, downstream purchasing enthusiasm waned.
Most of the copper rod plants using copper scrap saw accumulation of finished product inventory last week. It is necessary to continue to pay attention to when the terminal real estate consumption will pick up to stimulate the consumption of copper rod produced with copper scrap.
The slow delivery taking by downstream wire and cable factories has caused cash flow issues to copper rod plants using copper scrap. Therefore, the latter purchased mainly on demand, weakening the demand for copper scrap. This, together with growing supplies of copper scrap, led to ample copper scrap supply last week.
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