According to the latest data from SMM, the comprehensive operating rate of China’s copper billet enterprises recorded 44.26% in July, down 1.83 percentage points MoM and 0.56 percentage points YoY. Production in the industry remained low, and the polarization between large and small enterprises continued.
By enterprise size, the operating rate of large enterprises in the sample was 51.74% in July, still relying on long-term contracts and raw material channels to maintain relatively strong production resilience, but this was a pullback from June. The operating rate of medium-sized enterprises was 33.82%, while that of small enterprises was only 22.96%. In July, the operating rates of large, medium, and small enterprises declined in tandem, with small and medium-sized enterprises hit significantly harder than top-tier players, and the industry’s polarization persisted.
On the raw material side, supply constraints remained the core factor weighing on production. Controls on reverse invoicing for secondary resources continued to tighten, and the circulation of compliant secondary brass in China tightened. Enterprises turned to imported secondary brass to supplement raw materials, but overseas supply was tight, import offers stayed high, and raw material procurement costs remained elevated. Brass raw material prices rose, but fierce competition in the downstream end-user market made it difficult to pass costs on to finished products simultaneously, continuously compressing profit margins at copper billet processing enterprises. Small and medium-sized processing plants were under financial pressure, and with greater difficulty in obtaining materials, it was quite common for them to actively control and cut production.
Demand side, the industry was in its traditional consumption off-season in July. Procurement by traditional brass downstream terminals such as plumbing and valve, hardware, and sanitary ware remained weak. Most downstream users restocked only as needed, with weak willingness to stockpile proactively, and overall brass billet transactions were mediocre. Although structural orders for copper billets used in new energy and AI heat dissipation still provided support, the growth was limited and insufficient to offset the weakening demand in traditional sectors. Affected by weak orders, copper billet enterprises’ finished product inventories stayed at a relatively high level, and destocking progress in plants was slow, further suppressing production willingness.
Looking ahead to August, traditional off-season pressure is expected to intensify further. SMM’s sample enterprises reported that the tight raw material supply is unlikely to improve significantly in the short term and no clear recovery signals have emerged from end-users. SMM expects that in August, China’s comprehensive copper billet operating rate will pull back 2.04 percentage points MoM to 42.22%, down 1.6 percentage points YoY. By scale, large enterprises, although supported by some existing orders, will see their production edge down due to insufficient new orders. Small and medium-sized enterprises will continue to face the dual pressure of high-priced raw materials and insufficient end-user orders, with production remaining under pressure. In summary, short-term raw material bottlenecks and off-season demand will jointly exert downward pressure. China’s copper billet market is expected to remain in the doldrums; any recovery in industry operating rates and profitability will have to wait for looser raw material supply and the arrival of the traditional peak season for downstream consumption.
![Tight Raw Material Supply + Weakening Demand Drag Down July Copper Billet Operating Rates; August Off-Season Pressure Further Intensifies [SMM Analysis]](https://imgqn.smm.cn/usercenter/GfvuY20251217171708.jpg)
