Consumption Gradually Mediocre Near Year-End, Weekly Operating Rate of Copper Cathode Rod Declines as Expected [SMM Analysis]

This week, the SMM survey covered the production and sales of major medium and large-sized copper rod enterprises in China. The overall operating rate was 80.62%, down 1.75 percentage points MoM, and 1.29 percentage points lower than the expected value (surveyed enterprises: 21, capacity: 7.83 million mt).

This week, the weekly operating rate of major domestic copper cathode rod enterprises (12.13-12.19) fell to 80.62%, down 1.75 percentage points MoM and 1.29 percentage points below the expected value. Although supported by orders on hand, the YoY increase was still 8.96 percentage points, but the YoY growth rate has slowed. Copper prices declined this week, but downstream maintained just-in-time procurement near year-end. While year-end push-for-annual-target orders persisted, as the month is about to end, some enterprises have gradually slowed their pace, leading to a MoM decline in the operating rate.

From the inventory perspective, with the decline in the operating rate, raw material inventories of major domestic copper cathode rod plants decreased by 1.83% MoM this week, recorded at 42,950 mt. Meanwhile, finished product inventories at some enterprises saw an inventory buildup due to slower shipment pace, with finished product inventories of copper cathode rod plants increasing by 5.64% MoM, recorded at 58,100 mt. Looking ahead, as the countdown to 2024 begins, more enterprises are expected to gradually reduce production to recover funds. The operating rate of copper cathode rods is expected to continue declining to 77.29% next week (12.20-12.26), but the YoY growth is likely to be maintained.