High Copper Prices Impact Downstream Procurement; Recovery of Copper Wire and Cable Industry Awaits Acceleration [SMM Wire and Cable Market Weekly Review]

       This week (2.7-2.12), the operating rate of SMM copper wire and cable enterprises was 57.11%, up 29.75 percentage points MoM, 8.18 percentage points lower than the same period last year during the Lunar New Year, and 8.23 percentage points higher than the expected operating rate. According to SMM, copper wire and cable enterprises were still in the process of resuming production this week, with some workers yet to return to their posts. Although the operating rate saw a significant increase, many enterprises indicated that the recovery pace this year was slower than in previous Lunar New Year periods. This was mainly due to the unexpectedly high rise in copper prices after the holiday, which further dampened procurement enthusiasm amid an already incomplete recovery in downstream demand. Demand side, the downstream market was also in the recovery phase, with current orders mainly coming from the power sector, while downstream construction projects such as infrastructure and real estate had yet to resume. Regionally, the northern market recovered more slowly than the southern market due to colder weather. Given the high copper prices and elevated macro uncertainties, downstream customers are likely to remain cautious in placing orders. Most copper wire and cable enterprises expect the market recovery pace to slow next week, with orders primarily driven by rigid demand. SMM forecasts that the operating rate of copper wire and cable enterprises will increase by 11.67 percentage points MoM to 68.78% next week (2.14-2.20).