September Copper Plate/Sheet and Strip Operating Rate Continues to Rise, End-Use Orders Marginally Recover [SMM Analysis]

In September, the operating rate of copper plate/sheet and strip continued to grow, with end-use demand picking up. According to SMM survey data, the operating rate in September 2024 was 72.39%, up 1.15 percentage points MoM, but down 4.37 percentage points YoY. Large enterprises had an operating rate of 76.61%, medium-sized enterprises 67.87%, and small enterprises 66.36% (surveyed enterprises: 36, total capacity: 2.702 million mt). The industry benefited from increased end-use demand during the peak season. Copper prices showed an upward trend in September, initially dropping to around 72,000 yuan/mt, prompting end-users to restock at lower prices. As copper prices rose, there was additional restocking. For different enterprise sizes, the operating rate of small and medium-sized enterprises rebounded after previous declines, as issues with copper scrap procurement improved due to a narrowed price difference between copper cathode and copper scrap following early-month price adjustments. Large enterprises maintained stable operating rates. In terms of end-use sectors, NEV orders remained strong, and the share of connector orders continued to increase. Orders in the electrical and electronics sectors also grew, while those related to real estate construction and home decoration showed mediocre performance. Overall, the supply-demand structure for red and yellow brass plate/sheet and strip remains locally imbalanced, with strong demand for some bronze and white copper alloy plate/sheet and strip.

August Copper Plate/Sheet and Strip Enterprises' Raw Material Inventory Ratio at 16.89%

According to SMM statistics, the raw material inventory ratio for copper plate/sheet and strip enterprises in September was 16.89%, down MoM. The decrease in inventory ratio was partly due to increased production and faster order turnover, and partly due to cautious restocking as copper prices rose at the end of the month. Although many enterprises extended holidays due to a slowdown in orders before the National Day, post-holiday inventory digestion was still significant. (Raw material inventory ratio = raw material inventory/monthly production).

October 2024 Copper Plate/Sheet and Strip Operating Rate Expected at 70.28%

Looking ahead to October 2024, based on SMM's survey of production schedules, the average holiday duration for plate/sheet and strip enterprises during the National Day was 2-3 days, with a few enterprises not taking holidays due to good order performance, resulting in minimal impact on the operating rate. However, considering the short-term copper price trend, enterprises remain cautiously optimistic about future order increases, especially for scattered orders held by large and medium-sized enterprises. The operating rate in October is expected to drop back slightly, with declines in large and medium-sized enterprises, while small enterprises maintain stable orders. The operating rate for October is expected to be 70.28%, down 2.11 percentage points MoM.