Copper Cathode Rod Operating Rate Drops Amid High Prices

The operating rate of major copper cathode rod enterprises in China declined significantly this week. According to the Shanghai Metals Market, the rate dropped to 59.13% from August 28 to September 3, a decrease of 3.31 percentage points from last week and 10.65 percentage points from the same period last year.

The high copper prices caused some enterprises to cut production and destock due to high finished product inventories. This led to insufficient new orders and limited operations, keeping overall demand persistently weak. The terminals of wire and cable and enamelled wire were particularly affected by the high copper prices.

On the inventory side, copper rod enterprises were cautious in purchasing due to high premiums, mainly consuming raw material inventories. This resulted in a decline of 4.23 percentage points in raw material inventories from last week.

The Shanghai Metals Market predicts that new orders from this week will gradually enter the production schedule cycle next week, leading to an increase in operating rate. SMM expects the operating rate to rise by 1.36 percentage points to 60.49% next week.