Copper Prices Plunged, Copper Cathode Rod Operating Rate Exceeded Expectations: Will the Uptrend Continue Next Week? [SMM Copper Downstream Weekly Survey]

This week, the SMM survey covered the production and sales of major medium and large domestic copper rod makers. The overall operating rate was 78.15%, down 1.11 percentage points WoW but 5.48 percentage points higher than expected. (Surveyed enterprises: 21, capacity: 7.83 million mt).

Throughout the week, copper prices continued to decline, especially on Tuesday and Wednesday. During this week (Aug 30 - Sep 5), the price spread between copper cathode rod and copper scrap rod decreased by 298 yuan/mt WoW. The drop in copper prices below 72,000 yuan/mt further stimulated order releases, leading to a significant increase in downstream orders. Consequently, with the noticeable improvement in consumption, many enterprises saw their production exceed expectations. Some enterprises even postponed their planned maintenance to cope with the increased orders.

In terms of inventory, with the increase in production schedules, raw material inventories of copper cathode rod plants increased by 4.66% WoW, reaching 38,200 mt. Finished product inventories, driven by large enterprises, increased slightly by 1.6% WoW. However, most other copper cathode rod enterprises saw a decline in finished product inventories WoW. Looking ahead to next week, due to the upcoming delivery after Mid-Autumn Festival and the expectation of downstream stockpiling before the long holiday, current order support has given enterprises confidence. It is expected that the operating rate of major copper cathode rod makers will increase to 83.63% WoW during the week of Sep 6 - Sep 12.

Details of some surveyed copper cathode rod enterprises are attached.