According to SMM data, the operating rate of brass billet enterprises increased slightly by 0.13% MoM to 52.01% this week, indicating a slight rebound in production. However, this was mainly due to the exclusion of the Dragon Boat Festival holiday factor. After excluding the holiday disturbance, the weak downstream demand remained significant: orders in the home appliance market showed signs of accelerating weakness, with small and medium-sized producers reducing procurement volumes due to sluggish end-use consumption, and large enterprises also slowing down their production schedules due to inventory turnover pressure. The finished product inventories accumulated by most enterprises in the early stage have not yet been fully digested, and enterprises remain cautious about raw material procurement, refraining from stockpiling in large quantities. SMM samples showed that the days of raw material inventories decreased by 0.36 days MoM to 4.47 days this week, while the days of finished product inventories decreased by 0.19 days MoM to 6.73 days.
Looking ahead to next week, as the end of June approaches, the traditional off-season characteristics of the industry will become more pronounced: on the one hand, new orders for enterprises are expected to continue to decline, with some small and medium-sized producers only able to maintain production for 1-2 weeks with their orders on hand; on the other hand, the tight raw material supply situation has not improved. SMM expects the operating rate to decline by 0.32 percentage points MoM to 51.69% next week, and the industry will still need to operate under the dual pressures of shrinking demand and high raw material costs in the short term.
