Poor Downstream Copper Consumption during Off-Season

SHANGHAI, Dec 13 (SMM) – Wire and cable: The overall market was stable last week. The manufacturers controlled the orders taken to reduce capital risks at the end of the year, and purchased cautiously. The demand was poor as the orders from the engineering and real estate sectors weakened amid the colder weather in north China. Some small wire and cable manufacturers halted production due to the recent environmental protection issues in Ningjin county in Xingtai city of Hebei.

Copper cathode rod: The orders remained lacklustre last week, and there was no increase in the consumption. The weekly operating rates of major domestic copper cathode rod manufacturers were 69.24%, a decrease of 2.15 percentage points compared with the prior week. According to the SMM survey, the demand for copper rod from the wires and cables sector has not increased. Both downstream order placing and orders received by copper rod manufacturers have decreased to a certain extent due to year-end capital issues. At present, the consumption of copper cathode rod can hardly be boosted as the price difference between copper cathode and copper scrap has not widened sharply. The pandemic issues have affected the transportation of enamelled wire and cable manufacturers in Hangzhou, but the overall scope of impact is small.

Copper rod produced with copper scrap: With the decline of the copper prices, the sellers of copper scrap have held onto their cargoes, tightening the supply and bolstering the prices of copper scrap. As the consumption in the north weakened due to the seasonal factor, the consumption of copper rod produced with copper scrap was poor amid the lack of noticeable price advantage. This, coupled with the high copper scrap prices, have pushed many manufacturers of copper rod using copper scrap into losses, driving them to cut output. Xinxiang city of Henan province launched the red alert of heavy air pollution (level I response) again last week. On December 7, all copper processing plants in the region stopped production, and the resumption time has not been notified. With the Winter Olympic Games approaching, the environmental protection policy in the north will become stricter.