Processing margins for brass billet enterprises continue to shrink.

The National Bureau of Statistics (NBS) recently released data showing that from January to May, total retail sales of social consumer goods reached 20,603.1 billion yuan, up 1.4% YoY. Of this, retail sales of consumer goods excluding automobiles were 19,002.2 billion yuan, up 2.7%. In May, total retail sales of social consumer goods were 4,109 billion yuan, down 0.6% YoY. Of this, retail sales of consumer goods excluding automobiles reached 3,778.1 billion yuan, up 1.1%.

[SMM Brass Billet Flash] Looking ahead to next week (6.19-6.25), orders are expected to continue weakening. With high costs, weak demand, and raw material price inversion, fundamentals are unlikely to improve. SMM expects the brass billet operating rate to drop by another 1.18 percentage points WoW to 50.99% next week, keeping production in the sector under pressure.

[SMM Brass Billet Flash] According to SMM, as the Dragon Boat Festival holiday approached, some producers stockpiled modestly, and days of raw material inventories slightly rose to 3.67 days. However, supplies of secondary brass were tight, and enterprises had no strong motivation for large-scale restocking. End-user transactions remained mediocre, downstream cargo pick-up was slow, and days of finished product inventories increased to 5.41 days, intensifying the pressure to destock high inventories.