Copper Price Pullback Activates Downstream Restocking, Operating Rate of Copper Cathode Rod Rebounds Beyond Expectations [SMM Copper Cathode Rod Weekly Review]

The operating rate of major copper cathode rod enterprises in China this week (September 11-September 17) was 65.82%, up 4.32 percentage points MoM, up 5.8 percentage points from expectations, and down 4.91 percentage points YoY. This week's operating rate rebounded more than expected, mainly because copper prices pulled back more than market expectations. Downstream enterprises actively placed orders and restocked, and new orders for copper cathode rod enterprises increased significantly. By sector, operating rates of end-use industries such as wire and cable and enamelled wire rose, boosted by the larger-than-expected pullback in copper prices, but overall demand recovery for wire and cable enterprises still fell short of expectations. On the inventory side, lower absolute prices drove concentrated restocking by copper rod enterprises, with raw material inventories up 5.9 percentage points MoM. The pullback in copper prices, combined with the approaching Mid-Autumn Festival and National Day holidays, prompted downstream enterprises to stockpile in advance, pushing finished product inventories down 6.69 percentage points MoM. Looking ahead to next week (September 18-September 24), new orders are expected to continue growing, and with the holidays approaching and finished product inventories destocking at a faster pace, production willingness among copper cathode rod enterprises is strengthening. SMM therefore expects the operating rate of copper cathode rod enterprises to rise 2.31 percentage points MoM to 68.12% next week.