China's Copper Cathode Rod Operating Rate Continues to Decline Amid High Prices

Copper prices continued to rise in China, exceeding downstream psychological acceptance levels and suppressing new orders. As a result, the operating rate of major copper cathode rod enterprises fell by 1.77 percentage points week-over-week (WoW) to 58.3% during July 31 - August 6. This is also 10.56 percentage points lower than the same period last year.

The high prices led to a prevailing fear of further price increases, causing downstream clients to be cautious and only make small additional purchases. As a result, the operating rate continued to weaken, with industries such as wire and cable and enamelled wire being particularly affected by the weak demand.

On the inventory front, just-in-time procurement dominated, resulting in little fluctuation in raw material inventories. However, due to weak demand, finished product inventories rose 1.65 percentage points WoW. Looking ahead to next week (August 7 - August 13), SMM expects the operating rate of copper cathode rod enterprises to increase by 1.13 percentage points WoW to 59.42% as production resumes at enterprises that were previously under maintenance.