Inventory structure continues to deteriorate, with operating rate of copper cathode rod declining more than expected [SMM Weekly Review of Copper Cathode Rod Production]

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       Copper cathode rod: The weekly operating rate of major domestic copper cathode rod enterprises (from June 20 to June 26) declined to 74.01% on a WoW basis, down 1.81 percentage points WoW, 2.22 percentage points lower than the expected value, and up 4.99 percentage points YoY. This week, the center of copper prices continued to rise, while the off-season atmosphere in the downstream sector gradually emerged. The operating rate of wire and cable enterprises declined both YoY and WoW. Despite having semi-annual production tasks, copper cathode rod enterprises still saw a larger-than-expected decline in their weekly operating rate under the pressure of continuously increasing finished product inventories and weak new orders. From the perspective of specific inventories, as copper prices remained high, the operating rate of copper cathode rod enterprises was under pressure, and their raw material inventories decreased for the fourth consecutive week, down 2.60% WoW to 33,750 mt. In contrast, finished product inventories have increased for the fifth consecutive week. This week, the finished product inventories of copper cathode rod enterprises continued to increase by 5.56% WoW to 72,150 mt. Looking ahead, as the semi-annual period is about to end and July approaches, some enterprises plan to cut production and reduce inventories. Meanwhile, there is no significant improvement expected in downstream consumption. It is projected that the operating rate will slightly decline to 73.48% next week (from June 27 to July 3), down 0.53 percentage points WoW and up 4.99 percentage points YoY.