Pre-holiday production schedule supports high operating rates, yet new orders pull back significantly [SMM Enamelled Wire Market Weekly Review]

This week (9.18-9.24), the operating rate of enamelled wire industry machines rose 2.4 percentage points WoW to 75.13%. The continued rise in operating rates was driven on one hand by the concentrated release of orders last week, with enamelled wire enterprises maintaining high operating rates to ensure downstream demand for pre-holiday cargo pick-up; on the other hand, enamelled wire enterprises have plans to shut down or cut production during the National Day holiday, so they accelerated production progress before the holiday. In terms of orders, downstream clients placed concentrated orders last week, and most clients' stockpiling needs have largely been fulfilled. Coupled with current high copper prices suppressing market sentiment, the willingness to place orders this week was weak, driving new orders down sharply by 13.11 percentage points. On the inventory side, despite enterprises ramping up production before the holiday, downstream cargo pick-up was even stronger, resulting in a MoM decline in finished product inventories, with days of finished product inventories pulling back to 10.07 days. On the raw material side, affected by high copper prices and high premiums before the holiday, coupled with tight copper rod supply in South China, enterprises remained generally cautious about raw material stockpiling. Meanwhile, considering that logistics can be normally guaranteed during the holiday, there was no need to stockpile large quantities of materials in advance, so days of raw material inventories rebounded slightly to 3.13 days. As the holiday approaches, enterprises will arrange production cuts according to their production plans, and the industry machine operating rate is expected to pull back to 70.33% next week, with new orders continuing to decline.