Weak traditional support coupled with the impact of substitute materials may lead copper billet producers' operating rates to hit bottom again in July

According to SMM data, the composite operating rate of copper billet producers in June 2025 was 46.15%, down 4.46 percentage points MoM and 0.69 percentage points YoY. Specifically, the operating rate of large enterprises was 49.48%, that of medium-sized enterprises was 44.41%, and that of small enterprises was 29.81%.

As the traditional off-season for copper billet demand, the decline in operating rates in June was within the expectations of small and medium-sized enterprises. Normally, due to semi-annual task targets, large enterprises would perform relatively well in production and sales in June. However, this time, affected by high copper prices, downstream procurement demand was severely suppressed, and only a few large enterprises achieved a slight rise in operating rates in June. In terms of inventory, the days of raw material inventories for SMM sample enterprises decreased to 6.22 days, down 0.76 days MoM; the days of finished product inventories were 8.15 days, down 0.53 days MoM.

Looking ahead to July, market pessimism is strong. According to SMM, as June-August is the traditional off-season for copper billet demand, coupled with the current sustained high copper prices, it is difficult for enterprises to alleviate order pressure in the short term. The market expects that copper billet producers' operating rates will continue to decline in July. SMM predicts that the operating rate of copper billet producers will drop to 43.82% in July, continuing to decline by 2.33 percentage points MoM.

From an industry-wide perspective, traditional sectors, particularly real estate, failed to provide effective support for the copper billet market. Meanwhile, copper prices repeatedly breached periodic highs, driving a significant surge in production costs for brass billets. To control expenses, many downstream enterprises opted for substitute materials like stainless steel, leading to a continuous decline in orders for copper billet producers. Additionally, emerging industries such as new energy present high entry barriers, making it difficult for small-scale enterprises to participate. More small producers are expected to suspend operations and adopt a wait-and-see approach.

On raw material procurement, feedback from Ningbo traders indicated tight supply and persistently high prices for copper billet feedstock in the region. With domestic prices inverted against international levels, most enterprises opted for on-demand restocking domestically, ruling out large-scale external purchases unless copper prices experience a substantial drop.

Amid these overlapping unfavorable factors, SMM believes the downward trend in brass billet operating rates in July will be difficult to reverse.