According to SMM, the operating rate of copper cathode rod producers was 62.64% in August, down 4.37 percentage points MoM, 2.11 percentage points below expectations, and down 5.73 percentage points YoY. Among them, the operating rate of large enterprises was 72.34%, medium-sized enterprises 47.12%, and small enterprises 59.92%.
The operating rate of copper cathode rod enterprises was 62.64% in August, down 4.37 percentage points MoM and down 5.73 percentage points YoY. (The operating rate in July last year was 62.64%).
Overall, copper prices shot up continuously in August, and high copper prices significantly suppressed downstream orders, with new orders decreasing notably. Some enterprises suspended production for maintenance to avoid cost pressure, and the industry-wide operating level continued to pull back, with copper cathode rod output declining somewhat. By downstream sector, the two major consumption areas of wire & cable and enamelled wire were also under pressure, with weak demand performance and simultaneous contraction in operating rates and orders, showing overall seasonal pullback characteristics in demand. The foreign trade market was relatively active in August, with orders improving notably from July, but overall exports remained low, providing limited support to operating rates.
In August, days of raw material inventories at copper cathode rod enterprises were 2.03 days, and days of finished product inventories were 3.98 days.
This month, copper prices kept shooting up coupled with a wide price spread between futures contracts, so enterprises only made just-in-time procurement without concentrated restocking. Days of raw material inventories decreased by 0.1 days MoM, with relatively stable fluctuations. On the finished product side, downstream wire & cable and enamelled wire demand was weak, and insufficient orders led to low production enthusiasm. Cargo pick-up slowed down notably, finished product inventories accumulated significantly, and days of inventories increased by 0.2 days MoM.
The operating rate of copper cathode rod producers is expected to be 63.69% in September.
Looking ahead to September, the operating rate of copper cathode rod producers is expected to increase by 1.05 percentage points MoM to 63.69%, down 6.61 percentage points YoY. Copper prices stay high, and downstream acceptance is slowly improving, but wait-and-see sentiment persists, with limited rigid demand, making it difficult for new orders to recover significantly. September may underperform in peak season. Combined with expectations of the Mid-Autumn Festival holiday at the end of September, the operating rate is expected to rise only slightly.
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