High Copper Prices Suppress New Orders, Wire and Cable Enterprises' Operating Rate Under Pressure Next Week [SMM Wire and Cable Market Weekly Review]

This week (May 29 – June 4), the operating rate of SMM copper wire and cable enterprises recorded 68.37%, up 2.27 percentage points WoW and down 7.71 percentage points YoY. The increase this week was mainly due to the fulfillment of backlog orders scheduled for production, driven by the copper price pullback at the end of last week. Meanwhile, with copper prices fluctuating at highs this week, new order follow-up was sluggish. End-use demand side, grid orders weakened. Only demand for submarine cables and cables in the communications sector showed notable resilience, while demand in other sectors was relatively sluggish. Inventory side, the copper price pullback at the end of the week prompted enterprises to make periodic restocking. Raw material inventories increased 1.42% WoW, and finished product inventories increased 1.22% WoW, mainly because rising copper prices dampened end-user cargo pick-up enthusiasm. Looking ahead to next week, copper prices edged down again toward the end of this week but did not reach the psychological price level for end-user purchases. The market only released rigid demand, and new orders were scarce. SMM expects that next week (June 5 – June 11), the operating rate of copper wire and cable enterprises will decline further by 2.39 percentage points WoW to 65.98%, down 10.33 percentage points YoY.