Rising Copper Prices Suppress Demand, Operating Rates Fall Short of Expectations [SMM Enamelled Wire Market Weekly Review]

This week (5.8-5.14), the enamelled wire industry machine utilization rate rebounded 1.2 percentage points WoW to 73.67%. New orders for the industry edged up 0.14 percentage points WoW. The overall recovery fell short of market expectations, primarily constrained by elevated copper prices. Last week coincided with the Labour Day holiday, with industry orders and utilization both declining due to holiday disruptions. The market widely expected a significant recovery after resumption of work this week; however, persistently high copper prices notably suppressed downstream purchase willingness and production enthusiasm, dragging on the industry's recovery momentum and resulting in a relatively weak rebound in utilization and orders this week. Inventory side, affected by declining orders, enterprises adjusted their production pace to reduce inventories. Days of finished product inventories pulled back to 10.2 days WoW, and industry inventory pressure eased somewhat. Overall, under the combined headwinds of elevated copper prices suppressing purchase willingness and declining end-use demand, enterprises held mostly pessimistic expectations for subsequent orders. SMM expects the enamelled wire industry machine utilization rate to pull back to 72.33% next week.