Pre-holiday stocking lifts Sep copper rod operating rate; holidays to drag October’s rate down.

According to SMM, the operating rate of copper cathode rod enterprises in September was 66.07%, up 3.43 percentage points MoM, up 2.38 percentage points from expectations, and down 4.23 percentage points YoY. Among them, the operating rate of large enterprises was 76.62%, medium-sized enterprises 49.66%, and small enterprises 59.41%.

The operating rate of copper cathode rod enterprises in September was 66.07%, up 3.43 percentage points MoM and down 4.23 percentage points YoY. (The operating rate in September last year was 70.3%.)

Overall, driven by the National Day holiday in October, downstream users had pre-holiday stockpiling demand, and copper cathode rod enterprises proactively scheduled production, with production enthusiasm picking up somewhat. However, copper prices remained at highs throughout September, coupled with elevated price spreads between futures contracts, which suppressed downstream purchase willingness. The market was dominated by a wait-and-see sentiment, and actual stockpiling fell short of earlier expectations. By downstream sector, the two core consumption segments—wire and cable and enamelled wire—were both supported by pre-holiday stockpiling, with production recovering modestly. Foreign trade was relatively stable, with September order volumes showing little fluctuation compared with August, but overall export volumes remained low, providing limited boost to domestic copper cathode rod operating rates.

In September, days of raw material inventories at copper cathode rod enterprises were 1.78 days, and days of finished product inventories were 3.51 days.

High copper prices, combined with tight spot supply and high premiums, suppressed raw material procurement at rod plants, with days of raw material inventories down 0.25 days MoM. On the finished product side, enterprises had originally planned to increase output before the holiday, but high copper prices and high premiums dragged down some production schedules that failed to materialize. Coupled with continuous downstream cargo pick-up before the holiday, finished product inventories were also destocked, with days of finished product inventories down 0.34 days MoM.

The operating rate of copper cathode rod enterprises in October is expected to be 61.03%.

Looking ahead to October, the operating rate of copper cathode rod is expected to decrease by 5.04 percentage points MoM to 61.03%, down 0.12 percentage points YoY. This is mainly due to fewer production days during the National Day holiday, leading to a notable weakening in operations.