[SMM analysis] in June, the operating rate of cable enterprises was 103.27%. Large enterprises still maintained full production.

SMM, July 7:

The operating rate of wire and cable enterprises in June was 103.27%.

According to SMM, the operating rate of wire and cable enterprises was 103.27% in June, up 1.53% from the previous month and 13.57% from a year earlier. The cable operating rate continued to rise month-on-month in June, continuing the hot market in May, especially large manufacturers said that although the number of orders has declined, there is still no shortage of orders, in a state of full capacity. Due to the centralization effect of the cable industry orders to the head enterprises, large enterprises can still maintain full-load production, thus driving the overall cable operating rate to remain at a high level. However, on the other hand, the operating rate of small cable companies surveyed by SMM was 65.16% in June, down 6.45% from the previous month, and the enterprise reported that as the cable industry entered the off-season in the third quarter, the number of orders decreased significantly since July. Due to the double advantages of the rush effect of the epidemic and the vigorous implementation of infrastructure projects by the state in the second quarter, the performance of the cable industry in the second quarter was far better than that of the same period last year. From the perspective of the operating rate of SMM cable enterprises alone, it was more than 10 percentage points higher than that of the same period last year, which was a strong boost to domestic copper consumption in the second quarter. Despite the weakening of consumption in the third quarter, the expectation of future consumption is still relatively optimistic. (research enterprises: 23, production capacity: 1.55 million tons).

The raw material inventory ratio of wire and cable enterprises in June was 17.04%.

In June, the raw material inventory ratio of wire and cable enterprises was 17.04%, down 3.23 percentage points from the previous month. In June, the operation center of copper price moved up sharply, the lower reaches of copper price was afraid of high and cautious mining, priority was given to digesting raw material inventory, and the month-on-month ratio of raw material inventory decreased to a certain extent.

It is estimated that the operating rate of wire and cable enterprises will be 99.52% in July.

According to a survey by SMM, the operating rate of wire and cable enterprises is expected to be 99.52% in July, down 3.75% from the previous month, and still up 8.04% from a year earlier. At the beginning of the year, the State Grid increased its planned investment in 2020, the government vigorously promoted infrastructure projects, and cable consumption continued to grow significantly in the second quarter compared with the same period last year. However, with the rising temperature, the decrease of outdoor construction and the decline of workers' construction efficiency, cable consumption has entered the traditional off-season, cable enterprises reported that the number of orders decreased more obviously since July, and the expected operating rate was lower than that in June. but the overall performance is still better than the same period.

(SMM Wei Xue)