SMM data shows the comprehensive operating rate of copper billet producers in August 2025 was 43.87%, down 0.96 percentage points MoM and 6.69 percentage points YoY, exceeding previous expectations. By enterprise scale, large enterprises recorded 48.16%, medium-sized enterprises 39.5%, and small enterprises only 27.79%, reflecting overall weak performance as the industry remains in the adjustment phase of the traditional off-season.
Key factors behind the steeper-than-expected decline include:
1) Significant order structure divergence, with extruded billet markets suffering major impacts and pronounced declines, while continuous cast billet markets showed weak support due to off-seasons in refrigeration sectors. Some extruded billet producers shifted to continuous cast orders to maintain output but faced sustained margin compression.
2) Late August saw renewed policy adjustment signals for recycled copper raw materials, triggering widespread market concerns. Many enterprises opted for production cuts or suspensions while monitoring policy developments, actively controlling raw material inventories to avoid high-price risks. SMM sample enterprises held only 5.06 days of raw material inventories and 7.54 days of finished product inventories. Meanwhile, spot prices for imported recycled copper raw materials remained firm, continually pushing up production costs.
For September, SMM forecasts the copper billet operating rate will rebound slightly to 44.89%, up 1.02 percentage points MoM but still down 6.09% YoY, exhibiting "marginal MoM growth with YoY weakness." Despite entering the traditional September-October peak season, most enterprises report no significant end-user order recovery, with persistent high temperatures in some regions further delaying production resumption and weak demand recovery. Sector-wise, real estate and infrastructure show mediocre performance, failing to provide substantial support, while refrigeration sectors remain in off-season—some Guangdong enterprises even noted "virtually no downstream orders." Coupled with persistently high copper prices, downstream purchase willingness remains notably suppressed. Additionally, uncertainties surrounding secondary copper policies persist, with enterprises maintaining a strong wait-and-see sentiment. Tight raw material supply and persistently high prices continue to dampen production enthusiasm. Large enterprises can sustain moderate production levels by leveraging their channel advantages, while medium-sized enterprises exhibit mixed operating conditions. Small enterprises face dual pressures of insufficient orders and price competition, resulting in persistently low operating rates.
However, as the National Day holiday approaches, some downstream enterprises are expected to initiate stockpiling ahead of month-end, providing a certain boost to copper billet demand. Overall, the operating rates in September are projected to increase only slightly MoM, while remaining at a relatively low level YoY.
