Off-Season Combined with Losses, Brass Billet Operation Weakened This Week [SMM Brass Billet Market Weekly Review]

       This week (6.12–6.18), the operating rate of China’s brass billet industry stood at 52.17%, down 0.42 percentage points WoW. Copper prices continued to rally this week, while the traditional off-season set in. End-user purchase willingness from sectors such as home appliances, sanitary ware, and hardware remained subdued, leading to fewer new orders for enterprises, which still relied on prior backlogged orders to sustain production. As a result, operating rates edged slightly lower. Rising copper prices pushed up production costs, and some imported brass raw materials were already priced higher than finished billet prices in an inverted market, further squeezing enterprises’ processing margins. With the Dragon Boat Festival holiday approaching, some producers engaged in minor stockpiling, lifting days of raw material inventories slightly to 3.67 days. However, tight supply of secondary brass meant enterprises lacked the impetus for large-scale restocking. End-user transactions continued to be mediocre, downstream cargo pick-up remained slow, and days of finished product inventories climbed to 5.41 days, intensifying pressure to destock elevated inventories. Looking ahead to next week (6.19–6.25), orders are expected to stay on a weakening trend, with the fundamentals of high costs, soft demand, and inverted raw material prices unlikely to improve. SMM projects the operating rate will fall another 1.18 percentage points WoW to 50.99%, extending the pressure on industry production.