Operating Rates Of Copper Rod Factories Using Copper Scrap As Raw Materials Rallied Last Week

The operating rates of copper rod plants using copper scrap were 52.09% between May 8 and May 12, a surge of 9.38 percentage points from a week earlier, according to SMM survey of 15 plants with a capacity of 1.48 million mt/year). During Labour Day holidays, some copper rod plants using copper scrap as raw materials were forced to shut down due to the difficulty of purchasing raw materials. But they did not suspend purchasing raw materials during and after the holidays. Adequate raw materials enabled these plants to resume production last week, growing the average operating rate.

Notably, the recent low copper prices and significant price volatility have continued to suppress the enthusiasm of copper scrap suppliers for selling, limiting supply. Therefore, it is still difficult for copper rod factories using copper scrap as raw materials to purchase. Most of copper rod plants using copper scrap could sustain their production for only 1-2 days with existing inventories. Available spot copper rod produced with copper scrap is currently scarce as tight raw materials drove producers to cut output, raising quotes. Prices of copper rod produced with copper scrap were quoted with premiums over the SHFE front-month copper contract last week.

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