April Operating Rate Fell Both MoM and YoY, Multiple Factors Pressuring Continued Pullback in May

According to SMM, the comprehensive operating rate of the enamelled wire industry in April was 75.31%, down 2.44 percentage points MoM and 1.48 percentage points YoY. Specifically, the operating rate of large enterprises was 80.19%, medium-sized enterprises 62.86%, and small enterprises 71.53%.

In April, the industry operating rate fell both MoM and YoY, affected by multiple factors including declining end-user home appliance demand, depletion of subsequent procurement demand due to earlier concentrated orders, and copper prices under pressure at high levels. Demand side, there was clear structural divergence: new energy and power sector demand remained robust, providing strong support for the industry, while home appliance sector demand declined more than expectations, significantly dragging down industry operations. In addition, low copper prices in March stimulated concentrated release of orders, prematurely depleting subsequent stockpiling demand. High copper prices in April further suppressed new order growth. Demand in traditional industrial motors, two-wheelers, and other sectors also showed mediocre performance, with industry sentiment weakening.

Inventory side, enamelled wire enterprises built up finished product inventories ahead of the Labour Day holiday, but downstream willingness to pick up goods was weak and post-holiday shipments pace slowed down, pushing industry days of finished product inventories to climb to 10.79 days, with overall inventory levels slightly elevated.

SMM expects the enamelled wire industry operating rate in May to be 72.04%, down 3.27 percentage points MoM and 0.21 percentage points YoY. Entering May, enamelled wire industry orders showed a declining trend. According to SMM, although power and new energy demand remained positive, home appliance end performance continued to decline, with related enterprises reporting orders down over 20% YoY and having to initiate production cuts and inventory reduction strategies. Moreover, the enamelled wire industry is set to enter the traditional off-season in late May. Combined with production disruptions from the Labour Day holiday, multiple factors are collectively dragging down the industry operating rate to continue its pullback.