Off-Season Demand Remains Weak, Brass Billet Operating Rate Continues to Edge Down [SMM Brass Billet Market Weekly Review]

This week (July 24-30), the SMM brass billet enterprise weekly operating rate was 48.81%, pulling back slightly by 0.32 percentage point WoW, and industry production remained under pressure. The tight supply of recycled brass raw materials has not improved significantly, procurement costs of raw materials stayed high, and sample enterprises' days of raw material inventories were 3.58 days, remaining in a low range. The traditional downstream off-season continued, orders from end-use industries such as refrigeration, sanitary ware, and hardware remained weak, with no new demand support. Downstream procurement wait-and-see sentiment was strong, with purchases maintained at a small scale based on demand. The destocking process of brass billet finished products was slow, and sample enterprises' days of finished product inventories stood at 4.91 days.

Looking ahead to next week (July 31-August 6), the short-term end-user off-season conditions are unlikely to improve significantly, and it will take time for downstream orders to recover. Meanwhile, the situation of tight raw material supply and high raw material prices is expected to persist, suppressing enterprises’ production willingness. SMM expects that the operating rate of brass billet sample enterprises will continue to pull back slightly to 48.65%.