According to SMM, the operating rate of copper cathode rod enterprises in January 2025 was 56.74%, down 15.87 percentage points MoM and 6.49 percentage points lower than the expected value. Based on the lunar calendar, due to differences in the span of the Chinese New Year, the operating rate of copper cathode rods increased by 14.69 percentage points YoY. Among them, the operating rate of large enterprises was 64%, medium-sized enterprises 44.66%, and small enterprises 53.3%.
In January, the operating rate of the copper cathode rod industry recorded 56.74%, up 14.69 percentage points YoY (last February's operating rate was 42.05%).
As the Chinese New Year approached, the center of copper prices rebounded in January. According to SMM data, the average price of SMM #1 copper cathode in January was 75,023.61 yuan/mt, up 581.56 yuan/mt MoM from December. The price spread between copper cathode rods and secondary copper rods also widened. According to SMM statistics, in January, the average price spread between secondary copper rods in Jiangxi and power rods in east China was 1,218 yuan/mt, up 412 yuan/mt MoM. The advantage of copper cathode rods narrowed. Meanwhile, with the rise in the center of copper prices and news of the US imposing additional tariffs, some downstream enterprises were concerned that copper prices might pull back during or after the holiday. Pre-holiday restocking consumption was not significantly released, compounded by substantial consumption already released during the year-end push for annual targets when copper prices were low. As a result, the festive atmosphere intensified in January, and some copper cathode rod enterprises entered the holiday period early. The operating rate of copper cathode rods in January was 6.49 percentage points lower than expected. However, due to relatively sufficient orders on hand, the average operating rate for January-February 2025 is expected to still record 57.4%, slightly stronger YoY compared to the average operating rate of 55.36% in January-February 2024.
In January, the raw material inventory/output ratio of copper cathode rod enterprises was 10.04%, and the finished product inventory/output ratio was 16.13%.
As it was still during the holiday period, many enterprises had pre-holiday restocking that had not yet been digested. Especially with copper prices surging after the holiday, the digestion of finished product inventories slowed. In January 2025, the raw material inventory of copper cathode rod enterprises increased by 2.85 percentage points MoM, and the finished product inventory/output ratio increased by 6.37 percentage points MoM.
The operating rate of copper cathode rod enterprises in February 2025 is expected to be 58.07%.
As the Lantern Festival had not yet passed, the festive atmosphere persisted in the first half of February. Many downstream enterprises had not resumed work, and the continuous surge in copper prices after the holiday provided strong support. Downstream restocking actions were not evident, and new orders remained weak. If copper prices do not show a significant pullback in the short term, it may take until after the Lantern Festival for some rigid demand to be released. The operating rate in February is expected to increase slightly by 1.33 percentage points to 58.07%. Due to differences in the Chinese New Year cycle, this represents an increase of 16.02 percentage points YoY compared to February 2024 but a decrease of 13.07 percentage points YoY compared to March 2024.
