Copper Wire and Cable Operating Rate Remained Generally Stable, While Higher Copper Prices Limited the Release of New Orders [SMM Weekly Review of the Wire and Cable Market]

This week (March 20–26), the operating rate of SMM copper wire and cable enterprises was 70.77, up 0.24 percentage points MoM and down 2.09 percentage points YoY. Overall operating performance was stable, while market performance was relatively mediocre. During the week, the pullback in copper prices suppressed the release of new orders, but ample orders on hand and pending delivery orders supported basically stable production. By segment, new orders across downstream sectors were generally weak, with demand in the home decoration segment particularly mediocre due to rising plastic raw material prices. Industry production still mainly relied on orders on hand from the power and new energy sectors. Inventory side, the earlier pullback in copper prices drove concentrated restocking by enterprises, and raw material inventory fell 2.7% MoM this week as raw materials were mainly consumed from prior stockpiling. As for finished product inventories, the pullback in copper prices restrained downstream cargo pick-up, and finished product inventories therefore edged down 2.65% MoM. Looking ahead to next week, continued fluctuations in copper prices are expected to keep disturbing end-user procurement sentiment, while rising plastic prices will bring cost pressure. However, existing orders will continue to support enterprises’ baseline production schedules, leaving limited downside room for the operating rate. SMM expects the operating rate of copper wire and cable enterprises next week (March 27–April 2) to fall 1.54 percentage points MoM to 69.23, down 5.99 percentage points YoY.