Orders on Hand Were Digested and Demand Declined, Copper Cathode Rod Operating Rate Is Expected to Drop This Week [SMM Analysis]

Last week, the SMM survey covered the production and sales of major domestic medium and large copper rod enterprises. The overall operating rate was 82.37%, up 0.43 percentage points WoW but 0.86 percentage points lower than the expected value. (Surveyed enterprises: 21, capacity: 7.83 million mt).

Most enterprises maintained a high operating rate last week, gradually digesting orders on hand. However, new orders and shipments weakened to varying degrees, and overall market consumption showed a downward trend. From the inventory perspective, with the increase in operating rates, raw material inventories at major domestic copper cathode rod plants rose by 1.16% WoW to 43,750 mt last week. Meanwhile, finished product inventories increased by 9.13% WoW to 55,000 mt amid high operating rates and weakening overall demand.

Looking ahead, with declining demand and rising finished product inventories, some enterprises plan to conduct maintenance this week. Additionally, part of late-December consumption has been released in advance. Year-end orders are expected to decrease, and the operating rate of copper cathode rod producers is projected to slightly decline to 81.91% this week (12.13-12.19).