Copper Cathode Rod Operating Rates Edged Up This Week; Pullback Expected Next Week Due to Poor Order Continuity [SMM Copper Cathode Rod Weekly Review]

The operating rate of major copper cathode rod enterprises in China this week (July 3 - July 9) was 68.06%, up 2.46 ppts WoW, up 0.06 ppts from expectations, and up 1.06 ppts YoY. This week, copper prices moved sideways, and enterprise new orders were stable overall, basically flat from the previous week. Production was mainly supported by prior orders on hand, and copper cathode rod enterprises flexibly adjusted production schedules along with new order connections. However, resumption of production by enterprises that had previously cut output this week drove the overall operating rate higher. Downstream end-user wire and cable, and enamelled wire industries moved in sync. At current copper price levels, downstream acceptance was low, and industry operations remained stable, with limited fluctuations. Inventory side, affected by Typhoon No. 9 "Bavi" (super typhoon) and the approach of Friday, copper cathode rod enterprises concentrated cargo pick-up on Thursday to stockpile in advance as a precaution, leading raw material inventory to rise 3.14 ppts WoW. Meanwhile, downstream demand was weak and cargo pick-up pace slowed down, causing finished product inventory to rise 1.46 ppts WoW. Looking ahead to next week (July 10 - July 16), new order follow-through is expected to be weak, and enterprises will proactively lower production schedules. SMM expects the operating rate of copper cathode rod enterprises to decrease 2.9 ppts WoW to 65.16% next week.