Copper Cathode Rod Enterprises Resume Production, Boosting This Week's Operating Rates; Copper Price Pullback Fuels Expectations of Operating Rate Recovery Next Week [SMM Copper Cathode Rod Weekly Review]

The operating rate of major copper cathode rod enterprises in China this week (September 4–September 10) was 61.49%, up 2.37 percentage points WoW, up 1.01 percentage points from expectations, and down 6.04 percentage points YoY. The rebound in this week's operating rate was mainly driven by production resumptions at enterprises that had previously suspended or cut production; however, actual end-use demand remained weak, new orders were scarce, and copper prices consolidating at high levels after shooting up suppressed downstream purchase willingness. By sector, end-use industries such as wire and cable and enamelled wire were hit by rising copper prices, with insufficient rigid demand, and enterprises remained on the sidelines, with operating rates continuing to pull back. On the inventory side, under the pattern of high copper prices and high premiums, copper rod enterprises only maintained restocking for rigid demand, and raw material inventories fell 2.04 percentage points MoM; downstream cargo pick-up pace slowed down, dragging finished product inventories up 3.37 percentage points MoM. Looking ahead to next week (September 11–September 17), originally affected by insufficient new order continuity, the operating rate of copper cathode rod enterprises was expected to pull back MoM, so SMM expected the operating rate of copper cathode rod enterprises to fall 1.48 percentage points MoM to 60.02% next week. However, on Thursday night, copper prices pulled back sharply in the night session, with the absolute price center moving lower, driving downstream to actively fix prices, and there is a possibility that next week's operating rate may rebound beyond expectations.