[SMM analysis] the operating rate of enamelled wire industry dropped slightly in June, but generally not optimistic about July demand.

Published: Jul 10, 2020 17:07

Save

SMM, July 10: according to SMM research data, the operating rate of enamelled wire was 73.79% in June, down 0.19% from the previous month, and 0.32% higher than the expected 73.47%. Among them, the operating rate of large enterprises increased by 0.35% from a month earlier to 77.20%, while that of medium-sized enterprises fell by 1.66% to 68.10%. The discharge output of the air conditioning industry has increased sharply since June compared with May. According to industry online data, the output of major air conditioning enterprises increased by 18.2% in June from 15.25 million units compared with the previous month. Thanks to this, orders of large enamelled wire enterprises have increased, and the operating rate has increased. In addition, the demand for industrial motors with better early performance can continue in June. However, many enterprises reported that the export volume of their downstream terminal enterprises still failed to recover in June, and some even continued to weaken. Overall, domestic demand improved in June, but external demand remained weak.

It is estimated that the operating rate of enamelled wire enterprises will be 72.37% in July.

According to SMM, since late June, most enterprises have reported that downstream orders have begun to decrease, on the one hand, due to the impact of high copper prices: recently, copper prices have been constantly refreshing new highs for the year, and the willingness of downstream enterprises to place orders has obviously weakened; on the other hand, it is affected by the traditional off-season of the enamelled wire industry. The high copper price has also reduced the proportion of raw materials in the enamelled wire industry. As far as we know, the proportion of raw materials in the enamelled wire industry was 14.25% in June, down 1.03% from May. In addition, the emission rate of air-conditioning companies was also falling in July, down 8.6% from a month earlier; car production began to show weakness recently after several months of strong recovery; and exports such as power tools remained grim. Taken together, we expect the operating rate of enamelled wire enterprises to be 72.37% in July, down 1.42% from the previous month, which is significantly larger than the 0.19% decline in June.

"View SMM spot copper historical price

"Click to participate in the second China (Yingtan) Copper Industry Summit Forum and the 15th China International Copper Industry chain Summit"

"these enterprises have signed up! (part of the list of participants is attached)

To sign up for the summit or apply to join the SMM industry exchange group, please scan the code:

Processing fee quotation regeneration

Data Source Statement: Except for publicly available information, all other data are processed by SMM based on publicly available information, market communication, and relying on SMM's internal database model. They are for reference only and do not constitute decision-making recommendations.

For any inquiries or for more information, please contact: lemonzhao@smm.cn

For more information on how to access our research reports, please contact:service.en@smm.cn

Related News

7 hours ago

Zambia's Hichilema Re-elected, Focus Shifts to Copper Production Growth and Infrastructure Challenges

President Hakainde Hichilema’s re-election provides greater policy continuity for Zambia’s mining sector, but the focus is now shifting from investment commitments and macroeconomic stabilisation toward whether the country can translate its expanding copper project pipeline into sustained production growth. Official results confirmed Hichilema’s second-term victory on August 18, with around 60% of the vote. For mining investors, the result reduces uncertainty around the policy direction that has underpinned Zambia’s recent push to attract capital into copper and other strategic minerals. Zambia is targeting annual copper production of 3 million tonnes by 2031, nearly triple current output levels. The strategy depends on a combination of brownfield expansions, new mine developments and continued exploration, making execution over the next several years critical to determining whether the target can be achieved. The main constraint is increasingly infrastructure rather than geological potential. Mining companies have highlighted electricity availability as one of the most important risks to future production growth, with industry estimates indicating that roughly 2,000 MW of additional power capacity will be required to support the planned expansion of the mining sector. Climate risk adds further complexity. Zambia’s heavy dependence on hydropower leaves the system exposed to weak rainfall and reservoir inflows, while the developing 2026–27 El Niño raises the possibility of renewed pressure on electricity supply. Reuters notes that previous drought-related shortages constrained mining activity and remain an important risk to the country’s copper-growth outlook. From a copper-market perspective, Hichilema’s second term therefore represents a transition from policy continuity to delivery. Zambia has attracted renewed mining investment and built a substantial project pipeline, but reaching the 3 million-tonne target will depend on whether new mines and expansions can be brought online alongside sufficient power, infrastructure and financing.The next phase of Zambia’s copper story will therefore be measured less by announced investment and more by actual tonnes produced.

7 hours ago

13 hours ago

After Delivery, Sharp Drop in Copper Prices Curbs Suppliers' Shipments [SMM Secondary Copper Daily Review]

13 hours ago

LME Copper Inventories Rise by More Than 10kt in Two Days, Copper Prices Touch $14,000 at Low Levels

LME copper inventories increased for two consecutive trading sessions. On August 14, LME copper inventories increased by 2,850 mt to 207,800 mt, and on August 17, inventories further increased by 15,700 mt to 223,600 mt. The cumulative increase over the two trading sessions was 18,600 mt, representing a growth rate of about 9.1%. In particular, warehouse inflows reached 17,500 mt on August 17, driving a sharp rebound in inventories that day. In terms of warrant structure, as of August 17, LME copper registered warrants increased to 123,100 mt, up by 20,000 mt from August 14. Registered warrants increased significantly and the ratio of cancelled warrants declined; as inventories increased, intraday copper prices touched a low of around $14,000/mt.

13 hours ago