This week (5.29-6.04), China's brass billet industry continued the weak trend of the off-season, with the weekly operating rate of sample enterprises at 51.85%, down 0.16 percentage points WoW and 0.04 percentage points YoY. Supply side, secondary brass supply remained tight with quotes staying high. Combined with copper prices fluctuating at highs, enterprises' raw material procurement costs rose and stockpiling became more difficult, keeping raw material inventories at low levels. Demand side, the drag from the traditional off-season persisted. End-use demand in home appliances, sanitary ware, and hardware was sluggish. Downstream purchases were mostly sporadic restocking on demand. New orders increased only limitedly. Finished product inventory days remained at a relatively high 5.24 days, and market transactions were mediocre.
Looking ahead to next week (6.05-6.11), the fundamentals of tight raw materials, high costs, and weak end-use demand have not changed. SMM expects the industry operating rate to continue to decline by 0.25 percentage points WoW to 51.60%, down 0.41 percentage points YoY, with the industry's operating rate continuing to face downward pressure in the short term.
