According to SMM, the operating rate of copper cathode rod enterprises in June was 68.71%, up 1.16 ppt MoM, up 2.11 ppt from expectations, and up 1.42 ppt YoY. Among them, the operating rate was 80.34% for large enterprises, 50.14% for medium-sized enterprises, and 64.16% for small enterprises.
In June, the operating rate of copper cathode rod enterprises was 68.71%, down 1.16 percentage points MoM and up 1.42 percentage points YoY. (The operating rate in June last year was 67.29%.)
Overall, in June, the operating rate of secondary copper rod enterprises remained sluggish, with part of the market demand naturally shifting to copper cathode rod, which lent resilience to new orders for copper cathode rod and strongly supported production. Meanwhile, copper prices saw notable fluctuations during the month. When prices pulled back significantly, downstream enterprises concentrated on price fixing for stockpiling, releasing raw material procurement needs, further boosting copper cathode rod production and pushing up the operating rate. By downstream sector, at month-end, the pullback in copper prices led to a marked increase in new orders for the wire and cable and enamelled wire sectors, but limited by existing production schedules, overall operating rates pulled back slightly.
In June, days of raw material inventories for copper cathode rod enterprises stood at 1.94 days, and days of finished product inventories at 3.44 days.
This month, affected by wild swings in copper prices, rod producers were generally cautious in raw material procurement, mostly adopting a purchasing-as-needed model, only restocking slightly when copper prices pulled back. Days of raw material inventories decreased by 0.12 days MoM. Meanwhile, downstream wire and cable and enamelled wire manufacturers accelerated their pace of cargo pick-up, and finished product destocking quickened, driving a MoM decrease of 0.14 days in days of finished product inventories.
Estimated Operating Rate of Copper Cathode Rod Enterprises in July at 66.16%
Looking ahead to July, the operating rate of copper cathode rod is expected to decline by 2.55 percentage points MoM to 66.16%, and by 0.35 percentage points YoY. Currently, enterprises’ earlier orders on hand are gradually winding down, and downstream players remain cautious about the future copper price trend, leading to weak expectations for new orders and suppressing production loads; at the same time, markets outside China are entering the traditional consumption off-season, and support from foreign trade demand is weakening. Although foreign trade copper rod consumption accounts for a relatively small share overall, it will still push the industry’s overall operating rate lower.
