According to SMM, in July, the operating rate of copper cathode rod enterprises was 67.01%, down 1.7 percentage points MoM, up 0.84 percentage points from expectations, and up 0.5 percentage points YoY. Among them, the operating rate of large enterprises was 78.83%, medium-sized enterprises 48.73%, and small enterprises 58.05%.
In July, the operating rate of copper cathode rod enterprises stood at 67.01%, down 1.7 percentage points MoM but up 0.5 percentage points YoY (the operating rate in July last year was 66.51%).
Overall, copper prices sustained an upward trend in July, compounded by the persistently high premium on spot copper cathode earlier. As the market entered the traditional consumption off-season, downstream end-user orders were already weak; high copper prices further suppressed purchase willingness, causing new orders for copper cathode rod enterprises to keep weakening. Against this backdrop, many copper cathode rod plants voluntarily arranged maintenance and production cuts, the industry-wide operating level pulled back, and output of copper cathode rod declined. By downstream sector, the two major consumption areas of wire and cable and enamelled wire also bore the impact of high copper prices; enterprises grew more cautious in stockpiling and proactively controlled raw material inventory, while industry orders contracted in tandem, and overall demand exhibited a clear seasonal pullback.
In July, days of raw material inventories for copper cathode rod enterprises stood at 2.04 days, while days of finished product inventories were 3.66 days.
Copper prices kept rising this month, making enterprises generally more cautious in raw material procurement. Most adopted a strategy of purchasing as needed and restocking only for rigid demand, with days of raw material inventories up 0.1 days MoM. Meanwhile, sluggish downstream wire & cable and enamelled wire demand and lackluster production enthusiasm impeded finished product destocking, pushing days of finished product inventories up 0.22 days MoM.
The operating rate of copper cathode rod enterprises is expected to be 64.75% in August.
Looking ahead to August, the copper cathode rod operating rate is expected to decline 2.26 percentage points MoM to 64.75%, and drop 3.62 percentage points YoY. Copper prices stay high, downstream fear of high prices continues to ferment, wait-and-see sentiment in the market remains thick, new orders are unlikely to recover significantly, and the industry's August operating may continue to trend weakly. On the foreign trade side, imported copper premiums have pulled back. Affected by July orders falling short of expectations, some copper cathode rod enterprises lowered their quotes and accelerated the delivery pace of long-term contracts, which is expected to drive a MoM rebound in August exports. However, incremental new orders from outside China are limited, making it difficult to reverse weak domestic demand.
