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Operating rates at enameled wire producers beat expectations in September, producers optimisic over future demand

iconOct 21, 2020 15:28
Source:SMM
Operating rates at enameled wire producers rose 2.97 percentage points month on month and 9.25 percentage points year on year to 79.6% in September and beat expectations of 77.3%, SMM survey showed. Operating rates at large producers climbed 2.17 percentage points from August to 80.5%, increased 4.45 percentage points to 78.8% at medium-scale producers, and rose 3.62 percentage points to 65.7% at small producers.    

SHANGHAI, Oct 21 (SMM)—Operating rates at enameled wire producers rose 2.97 percentage points month on month and 9.25 percentage points year on year to 79.6% in September and beat expectations of 77.3%, SMM survey showed. Operating rates at large producers climbed 2.17 percentage points from August to 80.5%, increased 4.45 percentage points to 78.8% at medium-scale producers, and rose 3.62 percentage points to 65.7% at small producers.    

 

Survey of enamelled wire producers

 

Increasing orders from the industrial motor, electric bicycle and automobile industries contributed to higher operating rates. In addition, exports have increased significantly since early September, especially to Southeast Asia, also stimulating production. On September 28, the Ministry of Ecology and Environment issued the "Action Plan for Air Pollution Comprehensive Control in Beijing-Tianjin-Hebei and Surrounding Areas and the Fenwei Plain in Autumn and Winter of 2020-2021 ". Several enameled wire producers in Henan said their production has been affected and are concerned that the impact on their production will worsen in October, and some have even prepared for a complete shutdown. Despite strong orders, enameled wire producers did not increase raw material purchases due to ample copper rod supply and expectations of no significant rise in copper prices. The raw material inventory/output ratio was largely flat from August at 11.3% in September. 

 

Operating rates at enameled wire producers to fall to 77.3% in October

Operating rates at enameled wire producers are expected to fall 2.27 percentage points from September to 77.3% in October as most producers took a 4-day break during the National Day holidays and as producers in Henan are affected by measures to fight air pollution. A majority of producers reported significant increase in orders in October when compared to September and some expect the peak season to last till December. Some producers are about to run out of finished product inventories due to robust demand after the holidays. Some end-users in east China even purchased enameled wire from south China. As such, operating rates are likely to rebound in November.

Operating rates
Enameled wire

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