Ratio of Cancelled Warrants for LME Copper Inventories Continues Rising

[SMM Brass Billet Flash] The traditional off-season of the downstream copper billet industry continued. Orders from end-use industries showed no notable improvement, and only small-volume restocking on demand was maintained. Destocking of finished brass billet products was slow, and finished product inventories at sampled enterprises stood at 5.14 days this week, up slightly WoW. As copper prices continued to climb, raw material costs for brass billet processing enterprises rose; however, product price pass-through lagged, corporate profits were continuously squeezed, and the production enthusiasm of most enterprises was dampened.

[SMM Brass Billet Flash] According to SMM, the current tight supply situation for recycled brass raw materials has not eased. Raw material prices remain elevated, tracking copper prices. Days of raw material inventories at sampled enterprises stood at 3.49 days, still at a low level, and enterprises remain cautious about raw material stockpiling.

[SMM Brass Billet Flash] During the week of August 7-13, the weekly operating rate of SMM-surveyed brass billet producers was 48.52%, down 0.16 percentage point WoW and down 1.25 percentage points YoY, continuing its downward trend. Off-season market conditions are unlikely to reverse quickly, and the recovery in actual downstream orders still lacks drivers. Meanwhile, copper prices fluctuated at highs, and the tight supply of recycled brass raw materials persisted. High raw material costs will continue to squeeze corporate profits and curb production willingness. SMM expects the weekly operating rate to edge down further to 48.46% next week, down 1.37 percentage points YoY.