Countdown to Chinese New Year: Market Weakens, Operating Rate of Copper Cathode Rods Drops Sharply YoY [SMM Analysis]

       The weekly operating rate (1.17-1.23) of major domestic copper cathode rod enterprises declined as expected to 55.17%, down 15.29 percentage points MoM, 0.12 percentage points higher than the expected value, and down 6.85 percentage points YoY compared to the week before the Chinese New Year last year.

       Next week marks the beginning of the Chinese New Year, and market consumption is expected to weaken as usual, with both order volumes and shipments decreasing. Most enterprises are starting to enter the planned maintenance and production suspension period, leading to a predictable decline in the operating rate.

       From the inventory perspective, due to stocking demand for the Chinese New Year, finished product inventories at major domestic copper cathode rod plants increased by 25.04% MoM to 85,400 mt. Meanwhile, raw material inventories decreased by 7.15% MoM to 34,550 mt, as most enterprises are expected to resume work around the eighth day of the lunar calendar. Looking ahead, with the Chinese New Year holiday approaching, the weekly operating rate of copper cathode rods is expected to further decline to 19.61% next week (1.24-1.30), down 35.56 percentage points MoM and 12.27 percentage points YoY. Additionally, most copper cathode rod plants remain cautious about post-holiday consumption, with limited orders on hand. If copper prices experience a significant correction after the holiday, it may stimulate some replenishment-driven consumption.