High copper prices coupled with weak demand have led to a continued decline in the operating rate of brass billet producers [SMM Weekly Review of Brass Billet Market]

       According to SMM data, the operating rate of brass billet enterprises continued to show weakness this week, declining by 0.38% MoM to 50.8%.

       Demand side, orders for most enterprises continued to weaken, with existing market orders mostly being competed for by large enterprises, leaving small enterprises with virtually no orders. Under these circumstances, some enterprises significantly lowered brass billet prices to reduce inventory pressure. Additionally, export orders from the US accounted for approximately 35% of total enterprise orders. Due to tariff issues, business with the US has been suspended, leading to limited overall orders for enterprises. According to SMM, many valve factories on the market are experiencing poor operating conditions, with some even operating one day and resting four days.

       Regarding inventory data, the days of raw material inventories in SMM's sample declined by 0.23 days MoM to 5.04 days, mainly due to the current high copper prices and weak market demand, prompting enterprises to cautiously purchase raw material inventories to control risks. The days of finished product inventories decreased by 0.3 days MoM to 6.81 days, primarily due to enterprises actively reducing finished product inventory pressure at month-end.

       Looking ahead to next week, given the continued sluggish downstream demand and the further exacerbation of wait-and-see sentiment in the market due to high copper prices, SMM expects the weekly operating rate of brass billets to decline by an additional 0.13%, reaching 50.67%.