According to data from SMM, this week, the operating rate of brass billet enterprises recorded 49.51%, down by 0.32 percentage points MoM, operating at a generally medium-to-low level overall. In terms of inventory, a divergent pattern of "tight raw materials and stable finished products" emerged, with SMM sample enterprises having only 3.93 days of raw material inventories, indicating a relatively low reserve level, while finished product inventories stood at 5.73 days, a normal level.
Looking ahead to next week, the policy on the cleanup of tax refunds in the secondary copper industry is expected to become clear. If the policy is officially implemented from September, brass billet producers in Jiangxi will face significant impacts, as their previous cost advantages formed through tax refunds will gradually disappear. It is anticipated that some orders previously directed to Jiangxi will shift to regions with relatively minor policy impacts, such as Zhejiang. However, the overall industry order volume is expected to remain stable. Meanwhile, the market has not yet fully emerged from the traditional consumption off-season, with most enterprises reporting a slow pace of recovery in end-use demand. The general expectation is that demand will gradually recover by mid-September, with limited boosting effect on industry operating rates from demand in the short term. Overall, SMM expects that the operating rate of brass billet enterprises will continue to decline slightly next week, down by 0.13 percentage points MoM to 49.38%, with the industry overall maintaining a stable operation.
