Chinese Copper Cathode Rod Industry Faces Pressure from High Prices and Premiums

The copper cathode rod industry in China experienced an increase in holiday production downtime this year compared to last year, according to a survey conducted by SMM. The survey covered 20 major enterprises with a combined annual capacity of 7.66 million mt/year.

Copper prices fluctuated at highs earlier this year, suppressing downstream purchasing demand and triggering a concentrated release of rigid demand just before the holiday. As a result, new orders surged, but spot copper cathode in the market became increasingly scarce, with premiums climbing and raw material procurement becoming more difficult.

The combination of high copper prices and elevated premiums put significant capital pressure on copper cathode rod enterprises, while downstream wire and cable and enamelled wire enterprises had already restocked intensively during the earlier correction in copper prices. As a result, sentiment for raw material stockpiling weakened markedly.