Stocking Demand Delays Maintenance, Copper Cathode Rod Operating Rate Expected to Remain High [SMM Copper Downstream Weekly Operating Rate]

This week, the SMM survey covered the production and sales of major domestic medium and large copper rod enterprises. The comprehensive operating rate was 81.94%, down 2.31 percentage points WoW but 2.65 percentage points higher than expected. Meanwhile, the price difference between copper cathode rod and secondary copper rod narrowed by 655 yuan/mt YoY, and the operating rate increased by 13.1 percentage points YoY. (Surveyed enterprises: 21, capacity: 7.83 million mt).

This week, copper prices stabilized and rebounded, new orders were weak, and some enterprises conducted maintenance as scheduled, leading to a weekly decline in the operating rate of copper cathode rod. However, due to relatively sufficient orders on hand and just-in-time procurement from downstream this week, many enterprises plan to shift their focus to payment collection at month-end in December, with a need for finished product stocking. Therefore, some large enterprises delayed their maintenance plans, resulting in a higher-than-expected operating rate.

From the inventory perspective, with a slight decline in the operating rate, the finished product inventories of major domestic copper cathode rod plants decreased by 0.79% WoW this week, recording 50,400 mt, and the raw material inventories of copper cathode rod plants decreased by 1.14% WoW, recording 43,250 mt. Looking ahead, given the current insufficient finished product inventories of copper cathode rod enterprises and the support from stocking demand before month-end, the operating rate is expected to remain high next week (12.6-12.12), slightly rising to 82.92%.