Copper prices remain high amid off-season, cooling demand! Operating rates of cable producers declined significantly MoM in June【SMM analysis】

Copper prices have broken through the 80,000 yuan/mt threshold. Last year's delayed demand release versus this year's early overdraft. How are the operating rates and inventories of downstream copper wire and cable enterprises? Here is a detailed analysis:

According to SMM, the operating rate of copper wire and cable enterprises this week was 70.18%, down 3.08 percentage points MoM and 12.66 percentage points YoY. Last year, the delayed release of demand due to high copper prices supported the operating rate. However, the sharp drop in copper prices in April this year led to an early release of demand, followed by insufficient subsequent demand. The mismatch in the rhythm of supply and demand resulted in a significant YoY decline in the data.

As shown in the figure: In the same period of 2024, the rapid rise in copper prices suppressed purchase willingness, leading to a continuous buildup of finished product inventories. As copper prices pulled back, entering a destocking cycle, inventories dropped to a low of 19,600 mt, while the operating rate rebounded to 82.84% during the same period. In April 2025, the limit-down of copper prices stimulated the concentrated release of rigid demand, driving a rapid reduction in finished product inventories and an increase in the operating rate. Subsequently, copper prices rebounded to a high range. Against the backdrop of a marginal weakening in end-use demand, finished product inventories once again increased to a high of 23,310 mt, and enterprises proactively reduced the operating rate to 70.18% to curb the risk of inventory buildup.

Generally speaking, last year, market entities adopted a wait-and-see attitude due to high copper prices, and pent-up purchasing demand was released in a concentrated manner after the price correction, leading to a temporary boost in operating rates. However, while the price fluctuations in April this year prompted some demand to be realized ahead of schedule, weak end-use consumption and insufficient investment confidence resulted in a lack of follow-through demand growth, ultimately leading to a significant YoY decline in the data.