According to SMM, the operating rate of copper cathode rod enterprises in December was 72.60%, down 2.08 percentage points MoM, 2.09 percentage points higher than the expected value, and up 3.23 percentage points YoY. Among them, the operating rate of large enterprises was 83.27%, medium-sized enterprises 55.93%, and small enterprises 58.76%.
In December, the operating rate of the copper cathode rod industry recorded 72.60%, up 3.23 percentage points YoY (operating rate in December last year was 69.37%).
The center of copper prices continued to decline in December. According to SMM data, the average price of SMM #1 copper cathode in December was 74,442.05 yuan/mt, down 686.76 yuan/mt MoM from November. However, due to the upcoming implementation of reverse invoicing in January, copper scrap prices were under pressure during the month. The price spread between copper cathode rods and secondary copper rods slightly widened in December. According to SMM statistics, the average price spread between secondary copper rods in Jiangxi and power rods in east China was 806 yuan/mt, up 44 yuan/mt MoM. Some secondary copper rod enterprises suspended operations to observe the market, while certain orders on hand still provided support during December. The operating rate of copper cathode rod enterprises remained relatively high, ultimately exceeding the expected value by 2.09 percentage points. However, as the year-end approached, most enterprises shifted their focus to payment collection and year-end meetings, with varying degrees of financial tightening. Many enterprises arranged maintenance at year-end, reducing order intake. As a result, the operating rate of copper cathode rods in December fell by 2.08 percentage points MoM.
In December, the raw material inventory/output ratio of copper cathode rod enterprises was 7.19%, and the finished product inventory/output ratio was 9.76%.
With the decline in operating rates and maintenance by some enterprises, the raw material inventory/output ratio of copper cathode rod enterprises in December decreased by 0.7 percentage points MoM. Meanwhile, year-end consumption was somewhat mediocre, leading to a 0.95 percentage point MoM increase in the finished product inventory/output ratio.
The operating rate of copper cathode rod enterprises in January 2025 is expected to be 63.22%.
As the Chinese New Year approaches, the market is gradually becoming more subdued, and new orders from end-users are decreasing MoM. Although there will still be considerable orders on hand in early January, downstream consumption is expected to weaken further in mid-January. Communication with multiple enterprises indicates that many will begin maintenance in mid-January. Affected by the Chinese New Year holiday, the operating rate in January is expected to decline by 9.38 percentage points MoM to 63.22%. Since the Chinese New Year in 2025 falls at the end of January, spanning January-February, the operating rate is expected to increase by 21.17 percentage points YoY compared to the Chinese New Year in February 2024.
