Why were supply and demand of copper plate/strip market in Jiangxi province both weak in August?

August as the traditional demand off-peak season, downstream consumption declined, at the same time, power supply was in shortage, which further destroyed market sentiment. Besides, Jiangxi province was interrupted by COVID-19 lock down, which brought down copper plate/strip production and orders. Overall, August copper plate/strip market in Jiangxi province showed both supply and demand weakness.

Copper strip price in Jiangxi province was Yuan 68,200/t on August 31, +Yuan 1,310/t (+1.96%) compared with August 1. H62 brass strip price was Yuan 55,500/t on August 31, +Yuan 1,240/t (+2.29%) compared with August 1. Copper plate/strip price recovered from July bottom and fluctuated up in August.

Mysteel investigated four copper plate/strip producers in Jiangxi province on production and transaction data, showing that August production for these producers was 20.65kt, -1.3kt (-6.08%) MoM and August order was 17,07kt, -0.9kt (-5.28%) MoM. Thus, both production and demand in Jiangxi was weak. Production decreased because companies halted furnace on COVID-19 silence requirement. Demand fell as August is traditional demand weak season.

Market expects September demand will recover but COVID-19 control measures may interrupt consumption. In addition, more hawkish comments from the Fed may lead to more volatility in copper prices. Thus, Mysteel thinks huge demand increase in September is unlikely.

For queries and more information/data/reports access, please contact Paula Xu at xuzhongping@mysteel.com