[SMM announcement] notice on monthly Operation rate of enamelled Wire

Significance of monthly Operation rate of SMM enamelled Wire

Copper rod wire accounts for more than half of the copper consumption processing materials, about 53%. Copper rod wire is mainly used in the field of wire, cable and winding wire, in which the enamelled wire accounts for about 80% of the winding wire. The research on enamelled wire is very helpful to monitor the terminal consumer market in the lower reaches of copper. Enamelled wire is mainly used in electric power, household appliances, electronics, automotive and other industries, among which the power industry has a great demand for enamelled wire, mainly because motor and transformer are the most widely used areas of enamelled wire. The start-up rate of enamelled wire basically reflects the relationship between supply and demand in the winding wire market. It also reflects the consumption of terminal power, automobile, home appliances, electronics and other industries. In order to have a better understanding of the consumption situation and future development trend of the terminal industry, SMM will officially release the monthly start-up rate of enamelled wire this month. The operation rate of SMM monthly enamelled wire not only pays attention to the sample coverage rate, but also takes into account the sample size distribution. At present, the sample market coverage rate is about 47.8%, which provides the most representative monthly start rate figure for the market.

Investigation of enamelled wire enterprises

The start-up rate of enamelled wire enterprises in June was 73.81%.

According to SMM survey data, the start-up rate of enamelled wire enterprises in June was 73.81 per cent. According to the feedback of most enterprises, the start-up rate of enamelled wire in June showed a downward trend compared with last year, and the current low start-up rate is mainly caused by the following aspects.

First, the macro economic and trade environment affects the copper industry market.

Since May 6, when Trump announced an increase in tariffs on China, the economic and trade environment between China and the United States has become increasingly tense. The price of copper has gone down all the way, and the macro-economic environment has suppressed the copper market. At the same time, the terminals of enamelled wire include electric power, household appliances, automobile, electronics and so on. Trade friction affects the export of some terminal areas and directly affects the demand of enamelled wire.

Second, the terminal consumption difference affects the demand of enamelled wire.

According to SMM research, the downstream of the enamelled wire is weak, in which the demand of the electric power industry is weak, and the performance of the automobile industry is not satisfactory. At the same time, the household electrical appliance industry also declined after June, pulling down the demand for enamelled wire. According to the understanding of SMM, the enamelled wire enterprises whose terminals are mainly transformers are less affected at present.

Third, strict environmental protection to increase the production pressure of enamelled wire enterprises.

With the increasing attention of the state to environmental protection, the pressure of environmental protection of enamelled wire enterprises is increasing, the input cost of environmental protection is higher, the profits of enterprises are compressed, the capital pressure of some enterprises is tight, and the willingness to put into production is not active.

Based on the above reasons, the start-up rate of enamelled wire enterprises in June is not as expected, there is a downward trend.

The operating rate of enamelled wire enterprises is expected to be 71.63% in July.

According to SMM research, most of the enamelled wire enterprises are pessimistic about future consumption, first of all due to July, August and September into the enamelled wire industry off-season. Second, due to the global macroeconomic slowdown, weak consumption downstream of the enamelled wire industry, insufficient orders, the pace of production is expected to slow, which in turn led to a decline in the start-up rate in July.

(27 research enterprises with a production capacity of 861000 tons)

Sample distribution

At present, the enamelled wire industry is mainly distributed in the Yangtze River Delta, Pearl River Delta, and Bohai Bay region, most of the enterprises are located in East China, mainly in Zhejiang, Anhui, Jiangsu, Shandong, Shanghai and other places; the second largest region is South China, mainly distributed in Guangdong Province. According to its regional distribution in China, SMM collects market information according to large, medium and small samples as far as possible in the main distribution centers, so that the sample distribution is more reasonable and can truly reflect the market dynamics.

July 4, 2019 Song Yao