Weak demand coupled with cost pressure continued to drive down the operating rates of copper billet producers in May

According to data from SMM, the operating rates of copper billet producers reached 50.61% in May 2025, down 4.36% MoM, indicating a weakening trend in the industry's operations. By scale, the operating rate of large enterprises was 53.42%, that of medium-sized enterprises was 49.54%, and that of small enterprises was 35.87%.

May Market Review: Weak Demand and Slow Inventory Drawdown
After the Labour Day holiday, the early onset of the off-season was evident. Most enterprises reported that the actual downtime during the holiday increased by approximately one day compared to last year. Coupled with the sustained highs in raw material prices, the willingness of end-users to restock decreased, with enterprises only making just-in-time procurement, leading to a significant reduction in demand for brass billets. The days of raw material inventories for SMM's sample enterprises in May decreased by 0.5 days MoM to 6.98 days, while the days of finished product inventories also decreased slightly by 0.3 days MoM to 8.68 days. Despite enterprises' proactive efforts to reduce inventories, the drawdown speed of finished product inventories remained slow amid weak demand, with some enterprises still facing high inventory pressure.

June Outlook: Operating Rates May Continue to Decline, Industry Competition Intensifies
SMM expects the operating rate of copper billet producers to further decline to 47.11% in June, down 3.51 percentage points MoM. As the traditional off-season deepens, market demand is expected to continue contracting, with enterprises generally pessimistic about order prospects in June. In particular, order growth in traditional application areas is sluggish, exacerbating the "cut-throat competition" in the industry. Some enterprises are resorting to price cuts and sales promotions to stimulate orders, but the effects have been limited, with finished product inventories remaining high.

Additionally, the current high copper prices are further suppressing downstream procurement demand. Against the backdrop of high raw material costs and tight supply, enterprises are adopting a cautious restocking strategy, primarily operating with low inventory levels. SMM analysis suggests that enterprises' raw material inventories may continue to decline in June, while significant improvements in finished product inventories are unlikely. The industry is expected to face significant pressure in the short term.