Limited Off-Season Rigid Demand Release, Copper Cathode Rod Operating Rate Rebound Can Hardly Reverse Weak Orders [SMM Copper Cathode Rod Weekly Review]

The operating rate of major copper cathode rod enterprises in China this week (August 7–13) was 59.3%, up 1 percentage point WoW, 0.12 percentage points below expectations, and down 11.3 percentage points YoY. Currently, the market is in the traditional consumption off-season, and with copper prices consolidating at highs, downstream demand has yet to improve noticeably, while wait-and-see sentiment remains strong. Only on Thursday, when copper prices saw a slight correction, were a small number of rigid demand orders released; most buyers still waited for copper prices to move lower. Thanks to production resumptions at some capacity that was previously under maintenance, copper cathode rod operating rates rebounded slightly, but overall orders at enterprises remained weak. Downstream end-users such as wire and cable and enamelled wire continued to be pressured by high copper prices, with insufficient support from rigid demand. On the inventory side, previously price-fixed cargoes arrived at producers in a concentrated manner this week. Raw material inventories rose 2.43 percentage points WoW; although some downstream buyers engaged in price fixing during the copper price correction, the pace of cargo pick-up did not accelerate, demand remained relatively weak, and finished product inventories rose 1.78 percentage points WoW. Looking ahead to next week (August 14–20), previously placed rigid demand orders are expected to gradually enter production, and operating rates are expected to remain stable. SMM expects the operating rate of copper cathode rod enterprises next week to decline by 0.29 percentage points WoW to 59.01%.