SHANGHAI: The latest survey of 15 Copper rod plants using Copper scrap revealed that operating rates increased by 3.12 percentage points from the week prior, bringing the total to 61.64% between March 18 and March 24. With a combined capacity of 1.48 million mt/year, this increase is expected to have a positive impact on the industry.

Copper rod production rates in plants using Copper scrap saw a surge between March 18 and March 24, reaching a total of 61.64%. This was an increase of 3.12 percentage points compared to the week prior, which included 15 plants with a capacity of 1.48 million mt/year.

Copper prices saw a marginal increase last week as risk aversion weakened and new orders for wire and cable factories increased. The factories have started to purchase in anticipation of further gains in Copper prices. Copper rod factories which use Copper scrap saw an improvement in orders with faster delivery times. Thus, the product inventory of most factories has returned to normal levels. Despite this, the operating rate did not rise significantly. This is due to the limited availability of Copper scrap, causing difficulty in purchasing the raw material at competitive prices.

Copper rod produced with Copper scrap in Jiangxi was quoted last Friday with a discount of 1,095 yuan/mt. Meanwhile, electric Copper rod in the east of China was quoted with premiums of 630 yuan/mt over the contracts. This created a price spread of 1,725 yuan/mt between Copper cathode rod and Copper rod produced with Copper scrap.

The week prior saw an increasing difference in prices between the two materials, leading to increased consumption of the latter as a result. On top of this, higher overall Copper prices caused hectic trades and fast delivery times on these products as both producers and traders sought to destock their inventories.