Cable Resumption Steadily Advances, Demand Recovery Awaits Yuanxiao [SMM Wire and Cable Market Weekly Review]

This week (February 20–26), the SMM copper wire and cable enterprise operating rate was 27.72%, up 12.52 percentage points WoW. Since the eighth day of the first lunar month after the holiday, most wire and cable enterprises have resumed work gradually, but affected by the lagging recovery of end-users, they have not yet fully reached full production, with production mainly focused on executing pre-holiday orders on hand. By end-use sector, order structure showed significant divergence: orders from the power sector such as State Grid and China Southern Grid provided strong support, resulting in relatively good production schedules; orders from construction, communications, and other sectors performed weakly, with overall demand still in a rebound phase. Inventory side, after resuming work, enterprises mainly restocked cautiously, so raw material inventory this week increased 4.24% WoW; for finished product inventories, although enterprises prioritized inventory consumption, due to slow cargo pick-up by end-users, only a slight destocking was achieved, down 2.29% WoW. Looking ahead to next week, after the Lantern Festival, end-use industries will gradually resume work, and the pace of order release is expected to accelerate. SMM expects that next week (February 27–March 5) the copper wire and cable operating rate will increase 30.64 percentage points WoW to 58.36%, up 1.25 percentage points YoY compared to the second week after resumption last year.