Enamelled Wire: Sentiment Recovered Significantly in March, While Demand Concerns Intensified in April

According to SMM, the composite operating rate of the enamelled wire industry was 77.76% in March, up 33.91 percentage points MoM and up 3.38 percentage points YoY. Among them, the operating rate of large enterprises was 82.634%, that of medium-sized enterprises was 65.39%, and that of small enterprises was 73.76%.

The enamelled wire industry's operating rate performed strongly in March, mainly driven by lower copper prices and recovering end-use demand. The pullback in the center of copper prices effectively lifted downstream purchasing enthusiasm, boosting a concentrated release of new orders in stages. On the end-use demand side, the home appliance sector maintained strong peak-season momentum and became the core driver of orders and operating activity. At the same time, demand from the power sector continued to improve, while NEV, traditional industrial motors, and power tools also recovered in tandem. Broad-based improvement on the demand side supported continued increases in enterprise production schedules and pushed the industry's operating rate steadily higher.

On the inventory side, the concentrated release of orders in March, together with full production schedules at enterprises and a faster pace of downstream cargo pick-up, drove days of finished product inventories down to 10.45 days. According to the SMM survey, finished product inventories at enamelled wire enterprises are currently overall within the normal range.

According to SMM, new orders in the enamelled wire industry had already pulled back by month-end March, and the market showed clear divergence in demand structure. Among them, demand in sectors such as power and two-wheelers remained steady and improving, providing effective support to the industry. However, demand in the home appliance segment weakened more than expected, becoming the key variable dragging on overall sentiment. Affected by rising crude oil prices, which pushed up the cost of engineering plastics used in home appliances, along with shrinking demand outside China, home appliance enterprises such as air-conditioner makers saw a marked decline in willingness to stockpile and produce, which in turn dragged down overall enamelled wire orders. Enterprises generally held a cautious view on the sustainability of April orders. Overall, although some end-use demand still provides support, the weakening home appliance demand is expected to pull the enamelled wire industry's operating rate down to 73.81% in April, down 3.94 percentage points MoM and down 2.98 percentage points YoY.