January Operating Rate of Copper Plate/Sheet and Strip Declined as Expected, Post-Holiday Copper Prices Become the Focus of Recovery [SMM Analysis]

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SMM, January 9:

According to SMM, the overall operating rate of the copper plate/sheet and strip industry in January 2024 was 58.34%, down 15.96 percentage points MoM and 18.6 percentage points YoY. Among them, the operating rate of large enterprises was 50.57%, medium-sized enterprises 51.21%, and small enterprises 58.34%. The significant decline in the operating rate of the copper plate/sheet and strip industry in January was mainly due to the substantial impact of the Chinese New Year holiday, with some enterprises adjusting their production schedules in advance. From the perspective of copper price trends, copper prices in January showed a downward trend compared to the end of December, fluctuating between 72,500-74,000 yuan/mt. Overall, copper prices in January fluctuated downward within the range of 72,000-73,500 yuan/mt. Some enterprises adjusted their production schedules to seize the benefits of the export tax rebate policy, leading to a partial divergence in operating rates. Meanwhile, since the implementation of the new export tax rebate policy, export enterprises have gradually shifted from traditional export models to processing trade methods such as bonded processing and deep processing transfer, which temporarily boosted order recovery. From the perspective of terminal orders, after adjustments before and after the Chinese New Year, various end-use industries showed varying degrees of stabilization and recovery in January. Orders in the power and new energy sectors were relatively active, while the construction and machinery sectors exhibited stable or mildly upward trends. Enterprises should continue to monitor market policies and demand dynamics.

Raw Material Inventory Ratio of Copper Plate/Sheet and Strip Enterprises in January: 18.32%

According to SMM statistics, the raw material inventory ratio of copper plate/sheet and strip enterprises in January was 18.32%, up 2.89 percentage points MoM. The increase in inventory ratio in January was due to several factors: first, enterprises prepared post-holiday inventories to ensure the delivery of orders before and after the holiday, which increased raw material procurement volumes; second, the slower cargo pick-up speed by end-users, coupled with the high costs of shutting down equipment, led some enterprises to maintain production until the Chinese New Year break, resulting in an accumulation of finished product inventories at factories. (Raw material inventory ratio = raw material inventory/monthly production).

Operating Rate of Copper Plate/Sheet and Strip Industry Expected to Be 60.58% in February 2025
Looking ahead to February 2025, according to SMM, most copper plate/sheet and strip factories are expected to resume operations between the fifth and eighth days of the lunar new year. The overall pace of resumption of work and production in February is expected to align with forecasts. However, the short-term surge in copper prices may affect the procurement sentiment of end-user enterprises, and the overall post-holiday demand is expected to remain weak. This will impact the recovery of operating rates for large copper plate/sheet and strip enterprises, while small and medium-sized enterprises are expected to be relatively less affected. The overall operating rate is expected to rebound rapidly. Considering various factors, the overall operating rate of the copper plate/sheet and strip industry in February 2025 is expected to be 60.58%, up 2.3 percentage points MoM.