SHANGHAI, Apr 24 (SMM) – The average operating rate of copper rod plants using copper scrap were 58.27% between April 15 and April 21, a gain of 5.07 percentage points from a week earlier, according to SMM survey of 15 plants with a capacity of 1.48 million mt/year.
Output cuts at copper rod plants using copper scrap as raw materials in the past few weeks have led to scarce spot supply, prompting sellers to raise their quotes. Therefore, discounts of copper rod produced with copper scrap narrowed against SHFE front-month copper, down from 1,130 yuan/mt two Fridays ago to 520 yuan/mt last Friday. This eroded the economy of copper rod produced with copper scrap. With the recovery of end-user demand, the operating rates of copper rods plants using copper scrap will still rise slightly in the future.
As of April 21, copper rod produced with copper scrap in Jiangxi was quoted with a discount of 520 yuan/mt against SHFE front-month copper contract prices. Electric copper rod in east China was quoted with premiums of 570 yuan/mt over the contract. The price spread between copper cathode rod and copper rod produced with copper scrap narrowed 630 yuan/mt to 1,090 yuan/mt last week, to the disadvantage of traders who sought arbitrage. Therefore, purchases by wire and cable plants were more active than traders last week.
