The operating rate of copper wire and cable recovered WoW this week, while off-season constraints affect the sustainability of subsequent orders [SMM Wire and Cable Market Weekly Review]

This week (August 14-August 20), the operating rate of SMM copper wire and cable enterprises was recorded at 65.8%, up 3.55 percentage points MoM and down 3.08 percentage points YoY. During the week, copper prices retreated from highs, temporarily boosting downstream cargo pick-up willingness. However, bearish sentiment later re-emerged, leading downstream participants to stay on the sidelines, and overall orders only showed marginal improvement. The significant rebound in operating rate this period was also influenced by a low base from the prior week. Inventory side, amid retreat in copper prices from highs, wire and cable enterprises' point-price purchase willingness increased, but procurement remained largely need-based, with raw material inventories up 2.88% MoM. The initial pullback in copper prices stimulated moderate cargo pick-up from downstream, while finished product inventories edged down 1.62% MoM. Looking ahead to next week, supported by the carry-over of some orders from the end of this week into the production schedule, the operating rate of copper wire and cable is expected to rebound. However, the industry is still in the traditional consumption off-season, with end-use demand remaining weak overall. Even if copper prices edge down, the boost to new orders is limited, and order sustainability is insufficient. Therefore, SMM expects the operating rate of copper wire and cable for next week (August 21-August 27) to continue to edge up 1.3 percentage points MoM to 67.1%, down 0.71 percentage points YoY.