Copper prices shot up, suppressing orders, and copper cathode rod operating rates continued to pull back [SMM Copper Cathode Rod Weekly Review]

The operating rate of China’s major copper cathode rod enterprises was 58.3% during this week (July 31 - August 6), down 1.77 percentage points WoW, 1.78 percentage points lower than expected, and down 10.56 percentage points YoY. Copper prices continued to rise this week, far exceeding downstream psychological acceptance levels, and new orders kept weakening. Only a few downstream clients made small additional purchases on concerns that copper prices would shoot up further, but the prevailing fear of high prices intensified, dragging the operating rate of copper cathode rod enterprises further down. Downstream industries such as wire and cable and enamelled wire were also weighed down by high copper prices, with operating rates continuing to weaken and overall demand remaining sluggish. On the inventory front, just-in-time procurement dominated, and raw material inventories fluctuated little, edging up only 0.35 percentage points WoW. The willingness to pick up cargo downstream did not improve noticeably, and due to weak demand, finished product inventories rose 1.65 percentage points WoW. Looking ahead to next week (August 7 - August 13), most enterprises that were under maintenance earlier will resume production, and production at enterprises that previously cut output has also stabilized. SMM expects the operating rate of copper cathode rod enterprises to increase by 1.13 percentage points WoW to 59.42% next week.