According to SMM data, the comprehensive operating rate of sampled brass billet enterprises stood at 42.63% in August, down 1.63 percentage points MoM and down 1.24 percentage points YoY. The copper billet industry had yet to emerge from the traditional consumption off-season in August, while copper prices fluctuating at highs added further pressure to the market. Industry prosperity continued to pull back, and enterprise production remained under pressure.
On the raw material side, domestic and imported brass prices stayed high, continuously pushing up downstream procurement costs. The high-price pattern of raw materials showed no fundamental loosening during the month, and the squeeze on processing enterprises' profit margins continued to amplify. Under high cost pressure, production enthusiasm among sampled enterprises was notably suppressed, with some enterprises passively adjusting their production schedules and operating performance weakening further.
On the demand side, persistently high copper prices kept most end-users in a strong wait-and-see sentiment, reluctant to place orders rashly. Downstream willingness to restock at lows was insufficient, with only a small amount of rigid-demand orders released slowly, leaving overall market trading sentiment subdued. As a result, enterprise finished product inventory destocking was hindered, with some showing signs of passive accumulation, and the pace of capital recovery slowed down. Small and medium-sized enterprises, due to their relatively homogeneous order structures and weaker risk resistance, faced particularly prominent capital and order pressure, with production and operations generally under pressure.
Looking ahead to September, SMM expects the industry operating rate to rebound 0.59 percentage points MoM to 43.22%, though it will still be down 1.88 percentage points YoY, with the overall trend remaining in the doldrums. Based on enterprise feedback, new orders at the beginning of the month remain insufficient, and the market has yet to show clear signs of recovery. However, some wait-and-see clients previously suppressed by high prices may gradually release rigid-demand orders. Coupled with the approaching Mid-Autumn Festival holiday at the end of September, some downstream enterprises have pre-holiday stockpiling demand, which is expected to drive a modest recovery in operating rates in phases. It is worth noting that some enterprises have also chosen to suspend production or conduct maintenance during the holiday, constraining the room for operating rate recovery. Overall, while the brass billet industry's prosperity in September is expected to see a modest repair from August, the lack of strong demand drivers means the rebound is likely to be limited, and the industry as a whole will continue to operate in a weak pattern.
![Off-season Combined with High Prices Weighs on Operating Rates of Copper Billet Producers in August, with a Slight Recovery Expected in September [SMM Analysis]](https://imgqn.smm.cn/usercenter/Bwtty20251217171714.jpeg)
