High Copper Prices Combined with Off-Season Consumption Continue to Shrink Orders for Copper Cathode Rod Enterprises [SMM Copper Cathode Rod Weekly Review]

The operating rate of China's major copper cathode rod enterprises this week (Jul 24 - Jul 30) was 60.07%, down 2.49 percentage points WoW, up 2.49 percentage points from expectations, and down 11.66 percentage points YoY. Copper prices fluctuated at highs, coupled with the industry entering the traditional consumption off-season, downstream demand was generally weak, end-user rigid demand was insufficient, new orders growth for copper cathode rod enterprises was limited, and production continued to shrink. Downstream wire and cable and enamelled wire industries were also under pressure. Off-season sentiment combined with high copper prices suppressed purchase willingness, orders continued to shrink, further weighing on the operating load of copper cathode rods. Inventory side, earlier market raw material purchasing sentiment was weak, enterprise raw material inventories remained low for a long period; this week, some enterprises conducted restocking to meet rigid demand, raw material inventory up 1.77 percentage points WoW; but downstream willingness to pick up goods showed no improvement, persistently weak demand led to finished product inventory up 1.59 percentage points WoW. Looking ahead to next week (Jul 31 - Aug 6), enterprises that underwent maintenance earlier will gradually resume production, but some other enterprises will start production cuts, overall operating rate movement is limited. SMM expects the operating rate of copper cathode rod enterprises next week to fall 0.35 percentage points WoW to 59.72%.