Many leading companies in the enameled wire industry attended the 2023 SMM 3rd Electric Motor Annual Conference and the (5th) Rare Earth Permanent Magnet Industry Forum. The SMM Copper Research Team was fortunate to meet with the companies and discuss this year's market situation with them. The main talks are summarized as follows:
- Motor market demand has shrunk significantly
According to a large enterprise (the major downstream business is major appliance and motor business): From the perspective of the motor market, due to the technical reform of motor technology from "fixed frequency motor" to "variable frequency motor" in the past two years, the demand for enameled wire in the motor market has dropped significantly, and the company said that due to this impact, its related orders have shrunk by about 30% year-on-year. Many other enameled wire companies have the same feeling. In addition to motor orders, orders for home appliances, electronics and power tools have also been significantly reduced.
- Some large enterprises have long accounting periods, and corporate capital flow has become a key issue
Companies said that this year, in addition to weakening downstream demand and declining corporate orders, they are also worried about order payment periods and repayments. It is understood that the account period of some orders has been extended to about 11 months, and some orders cannot be paid back on time and completely according to the contract, increasing capital costs and operating risks for enameled wire companies. Many companies said that current orders have been reduced, and they have no choice but to accept orders with too long payment terms.
- The new energy field is the main goal and direction of corporate business expansion
The competition for traditional orders this year is extremely fierce. With the rise and development of the new energy field in the past two years, almost all leading enameled wire companies have set their sights on the new energy field. It is understood that many large-scale enameled wire leading companies have some involvement or layout in the new energy field. Almost all large companies believe that there is still a large room for development in the new energy field, but some companies have expressed their hope that the new energy field can continue. There are concerns about maintaining rapid development, indicating that companies may wait for the booming of the new energy field.
Overall, enameled wire companies are currently in a difficult situation, and companies believe that the industry is undergoing a "shuffle" process amid difficulties. In addition to the above problems, the expansion of production and the seizure of market orders by large enterprises have caused unprecedented pressure on small and medium-sized enterprises. The "Matthew Effect" may gradually be reflected in the enameled wire industry.
