SMM data showed that the operating rate of brass billet producers continued its downward trend this week, falling 1.8% MoM to 49%.
Currently in the traditional consumption off-season, weak market demand remains evident. According to SMM, orders at most brass billet producers kept declining, with some small enterprises suspending production and entering holiday mode due to excessive operational pressure. Enterprises from Guangdong region reported that downstream export market demand was significantly suppressed by international trade conditions, exacerbating industry challenges. Meanwhile, copper prices recently broke through periodic highs, substantially increasing brass billet production costs. Many downstream enterprises opted for substitute materials like stainless steel to control costs, further squeezing brass billet's market space. Producers also continuously reduced inventories, with SMM sample days of raw material inventories dropping 0.64 days MoM to 4.4 days, while finished product inventory days decreased 0.14 days to 6.66 days.
For next week, SMM analysis suggests that given persistent weak downstream demand and copper prices fluctuating at highs fueling strong wait-and-see sentiment, the weekly operating rate of brass billets is expected to decline further by 1.15 percentage points to 47.85%, with industry challenges continuing.
