![]() On the first day of the launch, industrial customers completed the first copper cathode transaction via QME’s online e-trading system, producing the spot benchmark price of QME copper cathode based on real transactions in Shanghai. QME is also planning to introduce regional copper cathode products in several major copper industry regions in Mainland China in the future. In addition, the real estate market is gradually bottoming out and picking up, which will also drive the recovery of housing-related consumption such as furniture, home appliances, construction and decoration.On 22 November 2019, Qianhai Mercantile Exchange (QME) officially rolled out spot copper, the 5 th spot product following alumina, aluminium billets, aluminium rods, and copper rods. ![]() ![]() In 2023, market confidence and expectations will improve amid China’s retreat from COVID-19 restrictions. Affected by factors such as the COVID-19 and economic downturn, copper consumption has been weaker than expectations. Real estate and other living infrastructure are also an important part of copper wire rod consumption. And consumption will also be directly affected before the Chinese New Year.Ĭopper wire rod accounts for the lion’s share of copper downstream consumption, while wire and cable is the main driver of copper wire rod consumption. China’s exit from controls against COVID-19, tough favourable for the consumption in a long-term point of view, will challenge both upstream and downstream industries due to surging COVID-19 cases. In the meantime, downstream demand for copper rod diminished due to the cold weather in north China. At the end of the year, most enterprises were more cautious about taking orders and slowed down production. The copper rod industry continued to be sluggish in the fourth quarter. As such, demand for copper cathode rod continued to weaken, and operating rates dropped in tandem. The consumption of enamelled wire remained poor. Meanwhile, the widespread of COVID-19 across Hebei and Guangdong forced wire and cable plants to slow order placement. The rise in copper prices and a wider price spread between the SHFE front-month and next-month contracts after the National Day holidays reduced orders significantly. This kept the spot premiums at highs, directly affecting copper consumption. The price spread between SHFE 20 copper contracts once exceeded 2,000 yuan/mt amid a short squeeze in the domestic and overseas markets. In the second half of the year, the increase in both domestic output and copper imports fell short of expectations, thus the domestic social inventory continued to decline. High spot premiums, COVID-19 pandemic and poor consumption have constrained the recovery of operating rates. The performance of the copper rod industry fell short of expectations during September-October 2022, the traditional peak season for copper rod. The continuous recovery of orders from copper wire and cable as well as the continuous loss of the price advantage of copper scrap rods contributed to higher operating rates of copper cathode rod plants. The prominent advantage of copper cathode rod, thanks to the price spread between copper cathode and copper scrap, grew orders of copper cathode rod remarkably. Thus, the price advantage of copper rods produced with copper scrap completely disappeared. The tight supply, combined with the high prices, caused the output of copper rod produced with copper scrap to decline sharply. The prices of copper scrap thus exceeded the prices of copper cathode. At the same time, copper scrap merchants were holding back their cargoes against losses, resulting in tight copper scrap supply in the market. ![]() SHANGHAI, Dec 29 (SMM) - SMM survey showed that operating rates of the copper cathode rod industry improved significantly in the second half of 2022 compared with the first half of the year, but the overall operating rate still underperformed the same period of previous years.ĭownstream buyers restocked in June when copper prices plummeted, spurring the demand for copper rod rapidly.
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