Off-Season Demand Weak, Tight Raw Material Constrains Output, Brass Billet Operation Edges Up Before Turning Down Next Week [SMM Brass Billet Market Weekly Review]

This week (6.26-7.2), the weekly operating rate of SMM’s brass billet sample enterprises recorded 50.80%, up 0.07 percentage points WoW, with the increase falling short of expectations . Driven by a previous phase of copper price pullback, the release of some rigid restocking demand prompted factories to slightly raise production schedules, leading to a marginal increase in operating rates this week. However, raw material constraints remained prominent, secondary brass supply stayed tight, procurement costs of raw materials stayed high, and most enterprises only maintained short-term turnover in raw material stockpiling, weighing on overall output release.

By downstream demand, traditional consumption sectors for brass end-users remained sluggish, with off-season procurement in home appliances, plumbing hardware, valves, and sanitary ware showing no improvement and insufficient new order growth. Meanwhile, the differentiated performance of copper billets stood out, as orders from NEVs, AI equipment, and electronics & electrical sectors showed strong resilience. In terms of inventories, this week's sample enterprises' days of raw material inventories were 3.82 days, down slightly WoW, as raw materials continued to be consumed and restocking willingness remained weak, with no easing of supply tightness. Days of finished product inventories stood at 5.16 days, with continued backlog pressure.

Looking ahead to next week (7.3-7.9), the traditional off-season headwinds will continue to dominate the market, with no positive factors from concentrated downstream stockpiling for brass, end-user wait-and-see sentiment resurfacing, while high raw material costs persist in constraining production flexibility. SMM expects the weekly operating rate of the brass billet industry to pull back by 0.65 percentage points WoW to 50.15% next week, with production remaining under pressure at low levels, and little sign of a trend improvement in the near term.