Seasonal Pullback in Enamelled Wire Operating Rate in February; Positive Peak-Season Outlook for March

According to SMM, the overall operating rate of the enamelled wire industry was 43.84% in February, down 27.25 percentage points MoM and down 12.15 percentage points YoY. Among them, the operating rate of large enterprises was 45.44%, that of medium-sized enterprise was 40.69%, and that of small enterprises was 39.72%.

In February, affected by the Chinese New Year holiday, most enamelled wire enterprises had fewer than 20 actual production days, with production hours significantly compressed, directly constraining the release of capacity and dragging down the industry’s overall operating rate. Meanwhile, the rebound in end-use consumption was relatively slow, and the window for concentrated demand release was pushed back to after the Lantern Festival, leaving insufficient order support in the early stage of enterprises’ resumption of work. Overall, the industry operating rate saw a seasonal pullback this month, which was a normal phenomenon during the Chinese New Year period, and the overall performance was in line with market expectations.

In February, days of finished product inventories at enamelled wire enterprises stood at 17.41 days, remaining at a high level. On the one hand, affected by the Chinese New Year holiday, enterprises’ production was relatively low this month, passively pushing up days of inventories; on the other hand, pre-holiday stockpiling, together with a slower pace of downstream pick-up goods after the holiday, jointly lifted finished product inventories across the industry.

The enamelled wire industry’s operating rate in March is expected to be 74.45%, up 30.61 percentage points MoM and up 0.08 percentage points YoY. Demand side, recent order releases from sectors such as home appliances and power transformers were relatively solid, with the home appliance sector providing a particularly notable boost to enamelled wire demand. According to enterprise feedback, orders on hand were sufficient, and some specifications were in tight supply with “not enough goods to ship”; operating rates in March are set to remain at full production. In addition, orders from the NEV and power transformer sectors also remained steady, and operating rates at relevant enterprises have rebounded to above 90%. March is the traditional peak season for the enamelled wire industry. Enterprises were generally optimistic about follow-up orders; combined with current production schedule based on orders, industry orders in March are expected to remain at peak-season levels.