[SMM Analysis] in May, the copper cable industry continues the hot market in April. It is expected that the cable operating rate will fall back to 97.11% in June.

SMM5 March 30:

The operating rate of cable enterprises in May was 101.74%.

According to SMM research data, the operating rate of cable enterprises in May was 101.74%, an increase of 1.30% from the previous month and 9.68% from the same period last year. Among them, the operating rate of large enterprises is 112.41%, that of medium-sized enterprises is 53.51%, and that of small enterprises is 71.61%. In May, the comprehensive operating rate of cable enterprises continued to pick up slightly from the previous month, with a significant increase over the same period last year. In May, the cable industry basically continued the hot market in April, with sufficient stock orders in the hands of enterprises, and production continued to maintain an all-time high. From May to June, the national network cable delivery volume was concentrated, the power cable industry orders continued to be hot, and the engineering orders also performed well. Overall, the high operating rate of the cable industry mainly depends on the promotion of power and engineering projects, and the performance of orders from real estate, home appliances, electronics and other industries is mediocre. The export orders of cable downstream enterprises still decreased significantly due to the epidemic. With the recovery of downstream consumption, enterprise finished product inventory basically returned to the normal level. (research enterprises: 23, production capacity: 1.55 million tons)

The raw material inventory ratio of cable enterprises was 20.27% in May.

In May, the raw material inventory ratio of cable enterprises was 20.27%, an increase of 3.80 percentage points from the previous month. The spot performance of copper rods was tight in April, especially in North China, where cross-regional transfers occurred due to shortage of goods. As the scrap copper rod industry resumes work, the copper rod supply is gradually abundant, and the copper rod raw material inventory in the cable industry has rebounded.

It is estimated that the operating rate of cable enterprises will be 97.11% in June.

According to a survey conducted by SMM, the operating rate of cable enterprises is expected to be 97.11% in June, a decrease of 4.63% from the previous month and an increase of 7.41% over the same period last year. The operating rate of cable enterprises declined month-on-month in June. According to corporate feedback, new orders began to weaken month-on-month since mid-May, and production remained at an all-time high in May due to plentiful stock orders, but production is expected to decline slightly in June. Compared with the same period last year, the current order situation is still good, the output of large enterprises in the second quarter is higher than that in the same period last year, and the current increment has basically made up for the reduction of work stoppage due to the epidemic in February and March. For consumption in the second half of the year, enterprises are more cautious, still worried that the economic downturn will drag down copper consumption.

(SMM Wei Xue)