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[SMM Analysis] consumption support is weak and pressure on Brass Bar Enterprises soars in May

iconJun 16, 2019 18:13
Source:SMM
According to SMM survey data, the average operating rate of brass rod enterprises in May was 73.94 per cent. It was down 5.71 percentage points from the previous month. Among them, the starting rate of large enterprises (annual capacity ≥ 50,000 tons) was 69.08%, down 5.09 percentage points from the previous month, and that of medium-sized enterprises (20,000 tons ≤ annual production capacity < 50,000 tons) was 76.81%, 5.86 percentage points lower than that of the previous month. The starting rate of small enterprises (annual production capacity < 20,000 tons) was 91.01%, a decrease of 8.76 percentage points compared with the previous month.

SMM, June 16 / PRNewswire-Asianet /-

The opening rate of brass bar enterprises in May was 73.94%.

According to SMM survey data, the average operating rate of brass rod enterprises in May was 73.94 per cent. It was down 5.71 percentage points from the previous month. Among them, the starting rate of large enterprises (annual capacity ≥ 50,000 tons) was 69.08%, down 5.09 percentage points from the previous month, and that of medium-sized enterprises (20,000 tons ≤ annual production capacity < 50,000 tons) was 76.81%, 5.86 percentage points lower than that of the previous month. The starting rate of small enterprises (annual production capacity < 20,000 tons) was 91.01%, a decrease of 8.76 percentage points compared with the previous month.

 

In May, the global trade environment continued to deteriorate, the export of copper rod downstream enterprises was hit hard, Zhejiang, Guangdong and other copper rod production concentrated exports were reduced. In addition, under the influence of the state's resolute implementation of "housing without speculation" this year, the negative effects of the decline in the housing reform plan in 2019 have gradually emerged, and the cooling of the real estate industry has led to a weakening of demand for copper bars in the market. At the same time, the overall consumption situation of the market also has a trend of entering the off-season, and the domestic production orders of enterprises have declined obviously. In addition to signs of weakness on the demand side, the import policy of "scrap six categories" has been implemented since July 1. According to SMM, some copper rod processing enterprises have suspended the import of scrap copper since May, fearing that the source of imports to Hong Kong in July will be affected by the import approval. Therefore, in the case of the continuous decline in copper prices in May, the gap between refined scrap prices has narrowed, and the market supply of scrap copper has been tightened, resulting in an increase in the production costs of copper scrap treatment enterprises, especially for some small enterprises. Capital pressure led to some enterprises forced to reduce production.

 

The opening rate of brass bar enterprises is expected to be 71.82% in June.

According to SMM research companies expect orders, the brass bar enterprise operating rate is expected to be 76.88% in June, down 2.12% from May. The starting rate continued to decline in June, and it was difficult for consumption in the off-season to promote construction, and copper scrap factors and strict environmental protection even affected enterprise production. Some enterprises in Zhejiang, which do import scrap copper business, said that there was an abundant supply of scrap copper to Hong Kong in June, but the market entered the situation of light demand, and some enterprises are expected to face high inventory pressure next month. (research enterprises: 28, production capacity: 1.02 million tons). No, no.

(research enterprises: 28, production capacity: 1.02 million tons).

 

(SMM Kwong Tze-si)

Start-up rate; brass rod
start-up rate
regeneration

For queries, please contact Michael Jiang at michaeljiang@smm.cn

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