According to SMM survey, the operating rates of copper rod makers using copper scrap averaged 43.02% in July, down 3.05 percentage points month on month but up 1.97 percentage points year on year. (Notes: SMM surveyed 43 producers with a combined capacity of 3.83 million mt/year.) The supply of copper scrap tightened in July even as copper prices inched higher. Suppliers of copper scrap who were selling aggressively in June when copper prices rose reported stock-out in July. Traders meanwhile lacked purchasing interest. Some copper rod plants were forced to halt production due to raw material shortages.
The raw material inventory/output ratio in July stood at 11.55%, down 2.96 percentage points month on month. On the consumption side, the price spread between copper rod produced with copper cathode and with copper scrap remained advantageous for users of copper rod produced with copper scrap. But the high absolute prices still weakened downstream buying interest. When the copper price exceeded 70,000 yuan/mt, most of the new orders came from traders. Due to the slow delivery-taking by traders, the production enthusiasm of copper rod factories using copper scrap failed to be boosted significantly.
