This week (6.26-7.2), the weekly operating rate of SMM’s brass billet sample enterprises recorded 50.80%, up 0.07 percentage points WoW, with the increase falling short of expectations . Driven by a previous phase of copper price pullback, the release of some rigid restocking demand prompted factories to slightly raise production schedules, leading to a marginal increase in operating rates this week. However, raw material constraints remained prominent, secondary brass supply stayed tight, procurement costs of raw materials stayed high, and most enterprises only maintained short-term turnover in raw material stockpiling, weighing on overall output release. By downstream demand, traditional consumption sectors for brass end-users remained sluggish, with off-season procurement in home appliances, plumbing hardware, valves, and sanitary ware showing no improvement and insufficient new order growth. Meanwhile, the differentiated performance of copper billets stood out, as orders from NEVs, AI equipment, and electronics & electrical sectors showed strong resilience. In terms of inventories, this week's sample enterprises' days of raw material inventories were 3.82 days, down slightly WoW, as raw materials continued to be consumed and restocking willingness remained weak, with no easing of supply tightness. Days of finished product inventories stood at 5.16 days, with continued backlog pressure. Looking ahead to next week (7.3-7.9), the traditional off-season headwinds will continue to dominate the market, with no positive factors from concentrated downstream stockpiling for brass, end-user wait-and-see sentiment resurfacing, while high raw material costs persist in constraining production flexibility. SMM expects the weekly operating rate of the brass billet industry to pull back by 0.65 percentage points WoW to 50.15% next week, with production remaining under pressure at low levels, and little sign of a trend improvement in the near term.

Ferrari and BMW are introducing aluminum wiring into new vehicle models, joining Tesla and several Chinese EV manufacturers in replacing part of their copper wiring with aluminum. Aluminum costs roughly one-quarter as much as copper and offers significant weight savings, helping improve vehicle efficiency and driving range. JPMorgan noted that aluminum substitution is accelerating across multiple sectors—including automotive, power cables and home appliances—and estimated that the broader substitution trend could affect around 2% of global copper demand in 2026. Under a scenario where copper supply remains tight and prices stay structurally elevated, the bank projects that as much as 6% of annual copper demand could be replaced by aluminum by 2030. However, due to copper's superior electrical conductivity and performance in high-specification applications, it is expected to remain the dominant conductor material in the near term.

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[SMM Brass Billet Flash] The core contradiction of "high costs, weak demand, and pessimistic expectations" in the brass billet market has not fundamentally reversed. On the one hand, international copper prices hover at highs, continuously raising production and import costs for brass billets, squeezing profits of domestic processing enterprises, and making import purchase willingness increasingly cautious. On the other hand, the recovery pace of traditional end-use consumption sectors such as real estate, home appliances, and hardware remains slow, downstream finished product orders are mediocre, overall spot trades are sluggish, and there is insufficient momentum for large-scale restocking.

According to the latest customs data, China's imports of copper-zinc alloy (brass) bars and rods in May 2026 reached 2,766.41 mt in physical content, up 8.19% YoY and surging 13.02% MoM. In January-May 2026, cumulative imports were 11,400 mt in physical content, a cumulative decline of 1.23% YoY (HS codes 74072111, 74072119, 74072190). From April to May, downstream users in China maintained a normal restocking pace, and with steady export order deliveries, monthly imports recovered on a MoM basis for consecutive months. However, overall end-use consumption showed no significant pickup, leaving cumulative imports still weak YoY. By source, South Korea remained China's largest supplier of brass billet, with imports from South Korea reaching 1,117.9 mt in May, up 13.85% MoM and 16.79% YoY, accounting for 40.41% of the total. Japan ranked second, with May imports at 439.88 mt, up 19.05% MoM but down 0.82% YoY, representing a 15.9% share. In May, imports from these two key source countries both rose MoM, as overseas producers' shipments and the domestic procurement pace picked up simultaneously. Japan and South Korea together supplied over 50% of the total, and the import source structure remained stable. On the import value side, growth remained divergent, and cost pressures continued to stand out. Import value in May was $26.7529 million, up 18.33% MoM and 38.04% YoY. In January-May 2026, cumulative import value reached $105.7079 million, a 23.42% YoY increase. A comparison shows that while imports in January-May fell 1.23% YoY in volume, import value surged 23.42% YoY, a sharp divergence. The key reason is that international copper raw material prices have been fluctuating at highs, pushing up the ex-factory cost of overseas brass billet, which then passed through to import prices and drove up unit transaction prices. Even though total import volumes were weak, overall import value maintained high growth. The core contradiction of "high costs, weak demand, and pessimistic expectations" in the brass billet market has not fundamentally reversed. On one hand, international copper prices have been fluctuating at highs, continuously raising production and import costs for brass billet, squeezing profits at domestic processing enterprises, and making import purchase willingness more cautious. On the other hand, end-use consumption in traditional sectors such as real estate, home appliances, and hardware has recovered slowly, downstream finished product orders have been mediocre, spot trades in the market have remained sluggish overall, and there has been insufficient drive for large-scale restocking. Based on import performance in May and downstream fundamentals, SMM expects that the brass billet import market will continue to operate at low levels for the rest of Q2 this year. Without a concentrated recovery in end-use demand, imports are unlikely to see a sustained significant rebound, and the game between high import prices and weak end-use demand will persist.

This week (6.12-6.18), the operating rate of China's brass billet industry stood at 52.17%, down 0.42 percentage points WoW. Copper prices continued to rise this week, coupled with the arrival of the traditional off-season for demand, end-user purchase willingness for home appliances, sanitary ware, and hardware was sluggish. Enterprises received fewer new orders and still relied on pre-existing orders to support production, leading to a slight weakening in operating rates.

This week (6.12–6.18), the operating rate of China’s brass billet industry stood at 52.17%, down 0.42 percentage points WoW. Copper prices continued to rally this week, while the traditional off-season set in. End-user purchase willingness from sectors such as home appliances, sanitary ware, and hardware remained subdued, leading to fewer new orders for enterprises, which still relied on prior backlogged orders to sustain production. As a result, operating rates edged slightly lower. Rising copper prices pushed up production costs, and some imported brass raw materials were already priced higher than finished billet prices in an inverted market, further squeezing enterprises’ processing margins. With the Dragon Boat Festival holiday approaching, some producers engaged in minor stockpiling, lifting days of raw material inventories slightly to 3.67 days. However, tight supply of secondary brass meant enterprises lacked the impetus for large-scale restocking. End-user transactions continued to be mediocre, downstream cargo pick-up remained slow, and days of finished product inventories climbed to 5.41 days, intensifying pressure to destock elevated inventories. Looking ahead to next week (6.19–6.25), orders are expected to stay on a weakening trend, with the fundamentals of high costs, soft demand, and inverted raw material prices unlikely to improve. SMM projects the operating rate will fall another 1.18 percentage points WoW to 50.99%, extending the pressure on industry production.