High Copper Prices Suppress Downstream Demand, Cable Production Recovery Falls Short of Expectations [SMM Wire and Cable Market Weekly Review]

This week (May 8–May 14), the SMM operating rate of copper wire and cable enterprises was recorded at 65.9%, up 2.67 percentage points WoW, 1.06 percentage points below expectations, and down 17.49 percentage points YoY. After the holiday, enterprises had largely resumed normal production pace, driving a slight recovery in operating rates. However, as copper prices continued to rise during the week, downstream willingness to take orders was suppressed, resulting in the rebound in operating rates falling short of expectations overall. End-use demand side, weighed down by copper prices fluctuating at highs, new orders across all sectors showed weakness this week. Inventory side, raw material inventory decreased 4.27% WoW, as enterprises remained cautious in stockpiling and purchase willingness under high copper prices, mostly maintaining just-in-time procurement. Finished product inventories side, weak new orders and slower downstream cargo pick-up led to industry-wide finished product inventory buildup, up 4.44% WoW. Looking ahead to next week, affected by weak order intake, the operating rate is expected to decline. However, as some enterprises are supported by stable orders, SMM expects the copper wire and cable operating rate next week (May 8–May 14) to continue declining 1.62 percentage points WoW to 64.28%.