Rigid Demand Support Coupled with Raw Material Constraints Kept Brass Billet Operating Rates Fluctuating Rangebound [SMM Brass Billet Market Weekly Review]

This week (3.20-3.26), the operating rate of China’s brass billet industry came in at 54.39%, up a mild 0.26 percentage points MoM, with the industry as a whole maintaining a mild trend. Downstream orders showed divergence: demand in the refrigeration valve fittings segment remained steady and improved, becoming the core driver supporting enterprises’ production schedules, while orders in traditional general-use segments such as hardware and plumbing were relatively stable, with enterprises mainly executing earlier contracts and taking a relatively cautious pace toward new orders. Affected by elevated prices for recycled brass raw materials and relatively tight spot circulation in the market, sample enterprises showed lower willingness to stockpile raw materials this week, and days of raw material inventories edged down to 4.35 days. Finished product inventories turnover remained stable at 5.39 days, and overall industry inventory pressure was limited;

Looking ahead to next week (3.27-4.2), fluctuations in copper prices are still expected to disturb downstream purchasing sentiment. Combined with the constraints of tight supply and elevated costs for recycled brass raw materials, this is expected to exert some restraint on enterprises’ operating loads. However, orders on hand will still provide support, leaving limited room for the operating rate to decline.SMM expects the operating rate of the brass billet industry next week to edge down 0.07 percentage points MoM to 54.32%, and the industry will continue to operate under a pattern driven by rigid demand and constrained by raw materials.