Operating rates of copper cathode rod plants rose as expected but are unlikely to sustain; future outlook remains uncertain [SMM Copper Downstream Weekly Survey]

This week, the SMM survey covered the production and sales of major domestic medium and large copper rod makers. The overall operating rate was 84.92%, up 5.60 percentage points WoW, and 1.23 percentage points higher than expected. (Surveyed enterprises: 21, capacity: 7.83 million mt).

From the perspective of actual consumption, since Tuesday (9.24), copper prices surged and remained high, significantly suppressing consumption. According to the survey, many copper cathode rod plants reported a 30%-60% drop in new orders after the price surge, as most downstream customers had completed major stockpiling when copper prices were below 76,000 yuan/mt, now only maintaining necessary purchases.

Regarding inventory, due to production needs during the National Day holiday and some enterprises' post-holiday stockpiling demand, raw material inventories at major domestic copper cathode rod plants rose sharply by 63.11% to 59,700 mt, and finished product inventories also increased by 10.67% to 74,700 mt.

Looking ahead to next week, most copper cathode rod plants will undergo shutdowns for maintenance at the beginning of the National Day holiday, with operating rates expected to drop to 52.06% (9.27-10.03). It is important to note that the unexpected surge in copper prices has led to a lack of confidence and clear expectations for the future among copper cathode rod plants. Enterprises will adjust production based on actual orders, and if copper prices do not significantly fall, short-term consumption is expected to be suppressed.