SHANGHAI, Feb 21 (SMM) – Operating rates across brass bar producers in China averaged 74.65% in January, down 6.96 percentage points from December as workers left for the Lunar New Year holidays and as tepid trading activity ahead of holidays lowered production enthusiasm, showed an SMM survey.
The rates across large plants with annual capacity above 50,000 mt fell 9.03 percentage points on the month to stand at 71.29%. Rates across plants with annual capacity of 20,000-50,000 mt went down 4.58 percentage points to 77.74% and rates across below 20,000 mt plants declined 7.06 percentage points to 81.88%.
While brass bar producers kept cautious about purchasing raw materials in December, their inventories of raw materials saw gains in January as the holidays and lower copper prices prompted them to restock.
Raw material inventories across brass bar producers are expected to stay at highs in February, due to limited orders as brass bar consumers are unlikely to return from holidays until the second half of the month.
The average operating rate across brass bar producers in China is estimated to slip 35.73 percentage points from January to stand at 38.92% in February as the holidays deterred production and consumption.
The SMM survey included 28 brass bar producers, with capacity totaling 1.02 million mt.