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

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.

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