[SMM analysis] the opening rate of brass bar enterprises fell 6.96 per cent in January from a month earlier.

SMM2, 21 / 21 / PRNewswire-FirstCall-Asianet /-

Due to the expansion of production capacity by brass rod companies for new projects this month, the effective capacity of brass bar companies surveyed this month was 1.016 million tons.

The opening rate of brass bar enterprises in January was 74.65%.

According to SMM data, the average operating rate of brass rod companies in January was 74.65 per cent. It was down 6.96 percent from the previous month. Among them, the operating rate of large enterprises (annual capacity ≥ 50,000 tons) was 71.29 percent, down 9.03 percentage points from the previous month, and that of medium-sized enterprises (20,000 tons ≤ annual capacity < 50,000 tons) was 77.74 percent, down 4.58 percentage points from the previous month. The operating rate of small enterprises (with an annual production capacity of less than 20,000 tons) was 81.88 percent, down 7.06 percentage points from the previous month.

According to some research enterprises, the main reason for the decline in the average operating rate of brass rod enterprises in January is that at the end of January, various enterprises gradually entered the Spring Festival holiday, workers went on holiday one after another, and the market gradually showed a light pattern on the eve of the holiday. Therefore, enterprises are not willing to actively produce, individual enterprises have taken over new projects a year ago, resulting in a small increase in output, but has little impact on the overall market situation.

Although the start-up rate has fallen, but according to the SMM survey, in December, although enterprises are cautious about the market, do not want to keep too much stock, but the raw material inventory in January still has a certain increase. In order to quickly resume production after the Spring Festival, enterprises have made a certain amount of inventory accumulation, coupled with the low copper prices in January to provide power for enterprises to enter the market. In addition, some enterprises will also require imported raw materials to come to Hong Kong in time before the Spring Festival, to avoid the arrival of goods to Hong Kong during the Spring Festival customs holiday, so some enterprises reflect that the current market scrap copper raw materials are relatively loose. SMM expects raw material stocks to remain temporarily high in February, as terminal companies start production by mid-to late February, resulting in a decrease in copper rod production orders and an increase in inventories of raw materials.

The opening rate of brass rod enterprises is expected to be 38.92% in February.

According to the expected orders of SMM research enterprises, the operating rate of copper rod enterprises is expected to be 38.92 percent in February, down 35.73 percentage points from January, mainly due to the sharp reduction in the number of production days in February as a result of the Spring Festival holiday. And due to the terminal industry started later, so led to the brass bar enterprises as a whole showed the situation of light orders. (research enterprises: 28, production capacity: 1.016 million tons).

(SMM Kwong Tze-sie)