High Copper Prices Dampened Consumption from Various End-Users

SHANGHAI, Feb 27 (SMM) –

Wire and cable: Orders failed to improve last week. According to the survey, the orders of large cable companies were stable. The commissioning of infrastructure construction projects which had been postponed before CNY holidays due to COVID-19 brought about new orders, ensuring stable production schedules. But orders of small and medium-sized cable factories underperformed the same period last year. During the week, the copper price exceeded the 70,000 yuan/mt mark, keeping downstream buyers on the sidelines. This, combined with poor consumption, kept downstream buyers cautious in placing orders. On the whole, the seasonal increase in orders for wire and cable was weaker than that of the same period last year, and it is difficult to see an improvement in February. The implementation of favourable policies for infrastructure and real estate during the two political sessions is expected to spur consumption.

Enamelled wire: Orders for enamelled round wire have picked up slightly last week. Some companies said that the inventory of finished products, which had previously been high, has declined, and their sales have kept pace with production. However, the overall order volume has not yet reached the normal level of previous years, especially the end-user demand for power tools and home appliances has not yet fully recovered. In terms of enamelled flat wires, orders related to new energy and traditional electric power continued to improve, and the current production schedule is brisk. On the whole, orders for enamelled round wires rebounded slightly last week, and the operating rate of most enamelled wire enterprises rose to 60-70%.

Copper rod produced with copper cathode: The operating rates at key copper rod producers using copper cathode were 58.6% last week, a decline of 3.25 percentage points from a week earlier. It is difficult to see a significant recovery in end-user demand, resulting in continued poor orders. According to the survey, apart from the slight improvement in the orders of the enamelled wire industry, the wire and cable industry, which is the main consumer for copper rods, was still weak. Moreover, the higher copper prices also restrained consumption to a certain extent. It is understood that there have been high inventory of finished products at several copper rod plants using copper cathode, which is expected to have an impact on subsequent production schedules. The price spread between copper rod produced with copper cathode and with copper scrap was still favourable for the consumption of the latter. But copper scrap rod plants reported poor orders last week, which reflected bleak end-user demand.