Operating Rate of Copper Cathode Rods Remains Stable, Finished Product Inventories Decline for Three Consecutive Weeks! [SMM Copper Downstream Weekly Survey]

This week, the SMM survey covered the production and sales of major domestic medium and large copper rod makers. The overall operating rate was 80.55%, down 0.37 percentage points MoM, below the expected value by 0.8 percentage points, and up 11.84 percentage points YoY. (Surveyed enterprises: 21, capacity: 7.83 million mt)

According to the SMM survey, when copper prices were low earlier, downstream enterprises concentrated on taking delivery and scheduling production, mainly releasing backlogged orders and some new orders. Therefore, this week, as copper prices rose and stabilized above 73,000 yuan/mt, new orders weakened, but the operating rate remained high supported by the existing production schedule. Currently, in terms of copper cathode and scrap substitution, about 20% of new orders for major domestic copper cathode rod makers are converted from scrap.

From the inventory perspective, due to the resumption of production, raw material inventories of copper cathode rod makers decreased by 2.07% MoM to 37,900 mt, and finished product inventories continued to decline by 3.51% MoM to 57,700 mt.

Looking ahead to next week, expectations among copper cathode rod makers are divided, with some expecting an increase and others a decrease in production. The overall operating rate is expected to rise slightly by 0.74 percentage points to 81.29%.