Dip Purchasing in Downstream Sectors Boosted Copper Cathode Consumption

SHANGHAI, Aug 24 (SMM) – Lower copper prices have improved copper cathode consumption. Copper prices fell from a high of around 70,000 yuan/mt to 66,000 yuan/mt last week. The price spread between copper cathode and copper scrap shrank with copper scrap prices 105 yuan/mt higher than copper cathode prices in the middle of the week. One seller said that cargoes for the next week have all been booked and would reduce supply to traders.

Copper rod produced with copper cathode: Operating rates stood at around 71.93% last week, an increase of 1.18 percentage points from a week earlier. Downstream cable and enamelled wire companies restocked amid continued declines in copper prices and a narrower price spread between copper cathode and copper scrap. Some end-user companies with low orders purchased on-demand. Orders increased noticeably last week across most producers of copper cathode rod. However, demand was depressed early last week by poor orders and disruptions from the pandemic, preventing operating rates from rising further.

Wire and cable: Orders at wire and cable companies increased slightly last week mainly driven by civilian distributors and downstream real estate companies. Orders from infrastructure construction by the State Grid and various engineering projects were lacklustre. Cable companies in major urban areas of Yangzhou remained shut due to the COVID-19 pandemic, and are expected to resume production at around August 25.

Enamelled wire: Orders grew on Thursday and Friday as end-user industries like industrial motors and power tools actively placed orders.

Copper plate and strip: Orders increased last week as lower copper prices bolstered the buying interest of end-users, mainly including power-related companies like electrical cabinet belts and wire and cable shielding belts.

The overall demand was not strong in the off-season.