In November, the raw material shortage for brass plate/sheet and strip led to lower-than-expected operating rates, only slightly increasing [SMM Analysis] 

According to SMM survey data, the operating rate for copper plate/sheet and strip in November 2024 was 73.55%, up 0.81 percentage points MoM, but down 5.07 percentage points YoY. Among these, large enterprises had an operating rate of 77.48%, medium-sized enterprises at 68.94%, and small enterprises at 68.73% (Surveyed enterprises: 36, total capacity: 2.702 million mt). The peak season momentum in the copper plate/sheet and strip industry continued in November, with marginal recovery in end-use consumption. Looking at copper price trends, overall copper prices in November were lower than at the end of October, fluctuating around 73,000-74,000 yuan/mt. From the perspective of enterprise scale, large enterprises saw an increase in operating rates, while medium and small enterprises performed poorly. This was mainly due to the impact of the new export tax rebate policy on copper materials, which led some large enterprises to rush export orders, temporarily increasing demand. For medium and small enterprises, especially those producing brass strip, the continuous rise in zinc prices increased raw material costs compared to before, coupled with tight copper scrap supply, dragging down production efficiency. From the end-user perspective, orders in the electrical and electronics fields maintained growth, while the new energy sector maintained a steady growth rate. Real estate, home decoration, and building materials showed mediocre performance, while apparel enterprises entered their seasonal peak. Overall, the market is steadily warming up, with no significant changes in the end-user structure.

In November, the raw material inventory/output ratio for copper plate/sheet and strip enterprises was 16.69%

According to SMM statistics, the raw material inventory/output ratio for these enterprises in November was 18.61%, a decrease of 1.92 percentage points MoM. The decrease in raw material inventory/output ratio in October was due to two reasons: compared to October, the number of production days increased, leading to relatively stable inventory turnover, and the increase in operating rates led to a slight decrease in raw material inventory. Additionally, the tight supply of secondary copper and secondary brass, particularly for brass strip producers, also dragged down copper procurement volumes.

Looking ahead to December 2024, based on SMM's survey of production schedules for copper plate/sheet and strip enterprises, the market is expected to drop back slightly in December. As the year-end approaches, copper plate/sheet and strip enterprises will gradually collect payments, leading to a seasonal weakening of production by the end of December, while a resurgence in copper prices will exert pressure on end-use demand. Additionally, the emergence of raw material shortages for copper alloy plate/sheet and strip may create purchasing pressures and hinder production turnover. It is expected that the operating rate for large copper plate/sheet and strip enterprises will remain stable in December, while medium and small enterprises will see a decline. The projected operating rate for copper plate/sheet and strip in December is 73.08%, a decrease of 0.47 percentage points MoM.