Brass Billet Production Slightly Recovered This Week, Short-Term Industry Remains Under Pressure [SMM Brass Billet Market Weekly Review]

During the week (6.05-6.11), the operating rate of the brass billet industry in China was 52.59%, up 0.74 percentage points WoW and up 0.58 percentage points YoY. Copper prices pulled back sharply this week, stimulating a moderate release of downstream rigid demand orders. Producers' enthusiasm for starting production increased, leading the industry operating rate to edge up. The decline in copper prices prompted enterprises to proactively stockpile at low prices. However, secondary brass supply remained tight and prices stayed high, constraining enterprises’ restocking room. As a result, raw material inventory only edged up to 3.57 days. On the demand side, the traditional off-season impact continued. Rigid demand from end-use industries such as home appliances, sanitary ware, and hardware was insufficient. Downstream cargo pick-up pace was slow, and overall market trading sentiment was mediocre. Currently, the industry's finished product inventory days remained high at 5.31 days, and destocking was under pressure. Most brass billet enterprises still needed to destock. Looking ahead to next week (6.12-6.18), most copper billet enterprises are expected to continue production based on previous orders. At present, with tight raw material supply, high costs, and weak end-use demand, the industry fundamentals have not improved significantly. SMM expects the industry operating rate next week to pull back slightly by 0.32 percentage points WoW to 52.27%, and up 1.0 percentage points YoY. The industry operating rate will remain under pressure in the short term.