October Operating Rates of Copper Billet Producers Continue to Rise, Expected to Fall Short of Expectations in November [SMM Analysis]

According to the SMM survey, the operating rates of copper billet producers in October 2024 were 51.25%, up 0.27% MoM. Specifically, the operating rate of large enterprises was 52.11%, medium-sized enterprises 50.82%, and small enterprises 46.99%. (Surveyed enterprises: 56, capacity: 2.25 million mt)

The operating rates of the copper billet market in October saw a slight MoM increase but were lower-than-expected. By product, precision rods and wires performed relatively stable due to moderate consumer demand driven by trade-in policies for home appliances, with extrusion rod and wire orders performing better than the same period last year. Additionally, market expectations that the trade volume between China and the US would be affected after Trump's election led some traders to stockpile in advance, boosting order recovery. However, continuous casting rods underperformed in October. Although the refrigeration sector was in the stocking period for valves and other components, a seasonal peak for copper billets, the recovery this year was lower-than-expected, providing limited boost to continuous casting rod orders. Overall, despite the seasonal peak, the copper billet market was in a recovery state but fell short of expectations.

According to the SMM survey, the operating rates of copper billet producers in November 2024 are expected to be 51.57%, up 0.32% MoM.

SMM understands that market expectations for a significant recovery in November operating rates are not high, mainly due to the weak recovery in the refrigeration industry, with limited boost from other sectors. Therefore, most copper billet enterprises expect order levels for the remaining two months to maintain the current level with limited growth. Additionally, copper billet enterprises indicated that although orders have somewhat recovered, industry profit margins continue to decline, with orders tending towards enterprises with better product quality. In terms of raw material supply, the current domestic market supply is relatively ample. Most traders, unable to predict the macro sentiment trend after Trump's election, are cautious in procurement, mainly restocking as needed without stockpiling.