High Copper Prices Combined with Off-Season Drag Down Cable Operating Rates This Week [SMM Wire and Cable Market Weekly Review]

This week (July 17 – July 24), the operating rate of SMM copper wire and cable enterprises recorded 67.18%, down 1.78 percentage points WoW and 3.65 percentage points YoY, with the industry's production load continuing its downward trend. During the week, copper prices fluctuated at highs, suppressing downstream purchasing willingness. Combined with overall order shrinkage in the traditional consumption off-season, most wire and cable enterprises only maintained basic production relying on pre-existing long-term contracts. On the inventory side, high copper prices increased working capital pressure for wire and cable enterprises, and their willingness to stockpile raw materials was low, with raw material inventory falling 2.16% WoW. Weakened end-use demand in the off-season slowed the delivery pace of orders on hand, and finished product inventory rose 1.54% WoW. Looking ahead to next week, copper prices pulled back slightly at the end of this week, releasing a small number of scattered orders in the short term. However, end-user wait-and-see sentiment remained strong, and overall order-taking performance was still weak. Combined with insufficient rigid demand in the off-season, SMM expects next week (July 25 – July 31) the operating rate of copper wire and cable will decline by another 0.83 percentage points WoW to 66.35%, and by 0.99 percentage points YoY.