Brass Billet Producers Face Continued Decline Due to High Raw Material Costs

Brass billet producers in China continue to face challenges as high raw material costs squeeze profits. According to a recent survey by SMM, the weekly operating rate of brass billet producers dropped to 48.52% during the week of August 7-13, down 0.16 percentage points from the previous week and 1.25 percentage points year-over-year.

The decline in operating rates is attributed to off-season market conditions and a lack of drivers for actual downstream orders. Meanwhile, copper prices have fluctuated at highs, and the tight supply of recycled brass raw materials persists.

SMM expects the weekly operating rate to edge down further to 48.46% next week, which would be a decrease of 1.37 percentage points year-over-year. The high raw material costs are expected to continue squeezing corporate profits and curtailing production willingness.