Downstream Consumption Maintains Rigid Demand, Copper Cathode Rod Operating Rate Continues to Decline [SMM Copper Downstream Weekly Survey]

Last week, the SMM survey covered the production and sales conditions of major medium and large copper rod enterprises in China. The comprehensive operating rate of enterprises was 74.12%, down 2.4 percentage points WoW and 1.97 percentage points lower than the expected value. (Surveyed enterprises: 21, capacity: 7.83 million mt).

In the last week of October, consumption showed no improvement, and downstream procurement maintained rigid demand for restocking, remaining basically flat WoW. However, downstream customers' pick-up slowed down to some extent, possibly due to stable copper prices, making downstream customers more cautious.

From the inventory perspective, due to the low capacity utilisation rate of large enterprises, raw material inventories increased. Last week, the raw material inventory of major domestic copper cathode rod plants increased by 10.9% WoW, reaching 44,250 mt. Meanwhile, with reduced operating rates and destocking, the finished product inventories of copper cathode rod enterprises decreased by 3.02% WoW, reaching 64,300 mt.

Looking ahead, as large enterprises are expected to complete maintenance this week and some enterprises need to consume raw material inventories, the operating rate is expected to rise to 79.75% this week (11.01-11.07).