Copper semis production to increase in China

Mysteel's weekly survey on China's copper semis production covers 27 refined copper rod, 31 secondary copper rod, 12 copper plate/strip, 31 copper tube, and 30 copper bar producers nationwide, with coverage of 48%, 38%, 32%, 72%, and 80% of total capacity, respectively. Surveyed markets include Shanghai, Guangdong, Jiangxi, Zhejiang, Tianjin, and other major markets in China.

                    Source: Mysteel

According to the survey, last week's output of refined copper rod, secondary copper rod, and copper tube decreased by 36.99%, 80.00%, and 14.61%, respectively, compared with the week prior to the Chinese New Year (CNY) holiday, reaching 43,100 tonnes, 1,400 tonnes, and 22,800 tonnes. Declines in these copper semis output were mainly attributed to the CNY holiday, during which most producers suspended production, and operations had yet been fully resumed post-holiday. Moreover, some refined copper rod manufacturers even postponed their resumption plans to early March due to insufficient orders. "We focus on long-term contract delivery currently. New orders are scarce, as raw material copper prices are too high," a refined copper rod producer in Guangdong told Mysteel. In addition, the significant drop in secondary copper rod weekly output was due to the uncertainty in copper scrap tax policy adjustments, which may impact producers' raw material cost. Consequently, most secondary copper rod enterprises stayed cautious about resuming production.

In contrast, the surveyed weekly output of copper plate/strip and copper bar increased by 11.70% and 12.37% week on week, standing at 10,500 tonnes and 14,260 tonnes last week, respectively, as post-holiday production resumption progressed relatively rapid. Copper plate/strip output was supported by demand from end-user sectors such as power equipment and new energy vehicles, which saw fast recovery, while copper bar production recovered on downstream raw material replenishment post-holiday.

Looking ahead, copper semis output in China is expected to generally grow, supported by end-user consumption recovery expected this week. Particularly, refined copper rod output is expected to see a short-term, concentrated rebound in the short-term, as most refined copper rod in-plant inventory has been delivery to fulfill previous orders, according to market reports.

Consequently, downstream consumption for raw material refined copper and copper scrap is expected to increase this week, providing support for copper prices. As of March 2, China's 1# refined copper spot price stood at Yuan 102,543/tonne ($14,899.5/tonne), rising by Yuan 685/tonne compared to the previous trading day. This week, refined copper prices are expected to trade between Yuan 100,500-105,000/tonne in China, according to Mysteel's assessment.

For more in-depth insights, long-term outlook, and comprehensive data on China's copper market, subscribe to Mysteel Copper Weekly, Mysteel Copper Monthly, and Mysteel Copper Database.

Written by Mingyuan Wang, wangmingyuan@mysteel.com