This week (March 6–12), the operating rate of SMM copper wire and cable enterprises was 66.59, up 5.69 points MoM and down 10.62 points YoY. The operating rate steadily rebounded this week, mainly due to a slight correction in copper prices that drove order release, coupled with support from concentrated power grid deliveries, though the current pace of order recovery remained weaker than in the same period last year. By sector, orders from the power segment continued to support enterprise production schedules, orders from the new energy segment also improved, while construction project orders remained weak, dragging on overall operating rates. Inventory side, the correction in copper prices drove enterprises to restock for rigid demand, but as enterprises maintained production schedules, days of raw material inventories fell 0.31 days MoM this week; for finished product inventories, the correction in copper prices boosted downstream consumption, but high copper prices still restrained end-user purchase willingness, so days of finished product inventories fell 0.41 days MoM. Looking ahead to next week, current orders on hand from the power and new energy sectors will continue to provide the main support for production scheduling. SMM expects the operating rate of copper wire and cable next week (March 13–19) to increase 3.45 points MoM to 70.04, down 4.49 points YoY.

SMM March 12 News: Today, Guangdong #1 copper cathode spot prices against the front-month contract: high-quality copper was quoted at 160 yuan/mt, unchanged from yesterday; standard-quality copper was quoted at a premium of 40 yuan/mt, unchanged from yesterday; SX-EW copper was quoted at a discount of 20 yuan/mt, unchanged from yesterday. The average price of Guangdong #1 copper cathode was 100,595 yuan/mt, down 265 yuan/mt from the previous trading day, and the average price of SX-EW copper was 100,475 yuan/mt, down 265 yuan/mt from the previous trading day. Spot market: Guangdong inventory had declined sharply for three consecutive days, mainly due to an increase in shipments. Current inventory had fallen by 10kt from the year-to-date high. Although inventory continued to fall today, traders and downstream buyers were markedly less active in restocking than yesterday; however, suppliers were unwilling to cut prices to sell, with significant disagreements between buyers and sellers, resulting in poor overall transactions. Today, purchasing sentiment for copper cathode in Guangdong was 2.4, down 0.11 from the previous trading day, and shipment sentiment was 3.3, down 0.27 from the previous trading day (historical data can be queried by logging into the database). Overall, traders and downstream buyers were markedly less active in restocking than yesterday, and spot premiums were unchanged from yesterday.

[SMM Shanghai Spot Copper] Looking ahead to next week, next Monday will be the last trading day of the SHFE copper 2603 contract. According to the SMM #1 copper cathode price assessment methodology, SMM always quotes against the front-month contract. The contango price spread between futures contracts narrowed slightly, and suppliers’ willingness to ship to delivery warehouses weakened somewhat, marginally loosening support for spot premiums. Meanwhile, import losses have narrowed substantially, and there are signs that the import window is about to open. If the window opens, it will bring in cargo from outside China, increasing pressure on spot supply in China and creating potential downward pressure on premiums. On the demand side, downstream enterprises maintained just-in-time procurement, providing some support for prices, but intraday, some downstream enterprises were seen to have limited acceptance of spot cargo with high premiums, with procurement turning more cautious. On the supply side, domestic copper and previously price-locked imported cargo continued to arrive, while social inventory remained high. As SMM always quotes against the front-month contract, the shift in the price spread between futures contracts is expected to result in high premiums against the front-month contract, though this is expected to be corrected on the second trading day. Overall, under the dominance of delivery logic, Shanghai spot copper premiums are expected to remain at elevated levels next Monday.

SMM Morning Meeting Summary: Overnight, LME copper opened at $13,044/mt. It touched a high of $13,063.5/mt in early trading, then the center moved lower to a low of $12,929/mt, and finally closed at $12,948.5/mt, down 0.77%. Trading volume came in at 17,000 lots, down 235 lots from the previous trading day; open interest stood at 304,000 lots, up 279 lots from the previous trading day, mainly reflecting an increase in bears' positions overall. Overnight, the most-traded SHFE copper 2604 contract opened at 101,240 yuan/mt. It touched a high of 101,240 yuan/mt at the open, then the center moved lower to a low of 100,560 yuan/mt, and finally closed at 100,860 yuan/mt, down 0.15%. Trading volume came in at 26,000 lots, down 62,000 lots from the previous trading day; open interest stood at 189,000 lots, down 3,320 lots from the previous trading day, mainly reflecting a reduction in bulls' positions overall.

Spot #1 copper cathode in North China was quoted at parity to a premium of 80 yuan/mt against the front-month contract today, with the average premium unchanged from the previous trading day at 40 yuan/mt, and the average transaction price down 155 yuan/mt from the previous trading day to 100,470 yuan/mt.

This week (3.6-3.12), the operating rate of the brass billet industry rose 8.72 percentage points WoW to 51.95%, with industry conditions continuing to rebound . According to enterprise feedback, overall orders were favorable, with Ningbo standing out in particular as order growth was significant and enterprises' production schedules were full; downstream traditional sectors such as hardware accessories and plumbing and sanitary ware had fully resumed work and production, with strong production enthusiasm. Meanwhile, orders from the refrigeration sector remained stable, continuing to support industry demand. In addition, copper prices pulled back to below 100,000 yuan/mt this week, boosting downstream purchase willingness to buy the dip and further driving order growth. Multiple positive factors pushed the operating rate steadily higher. On the inventory side, this week the industry had 4.23 days of raw material inventories and 5.06 days of finished product inventories, both returning to normal levels. Looking ahead to next week (3.13-3.19), enterprises currently had sufficient orders on hand and were all operating at full capacity. Some enterprises that resumed work relatively late after the Chinese New Year were stepping up production and accelerating deliveries. Along with the continued recovery in downstream demand, SMM expects the operating rate of the brass billet industry to increase 2.82 percentage points WoW to 54.77% next week, and the industry's recovery momentum is expected to continue.