2024 Semi-Annual Review and Outlook of the Enamelled Wire Industry [SMM Analysis]

Enamelled wire is one of the important downstream sectors of copper rods, widely used due to its product characteristics. According to SMM, household appliances and power equipment are the main downstream applications of enamelled wire, accounting for more than 60% of its consumption. Additionally, industrial motors, electric tools, and automotive motors are also significant downstream sectors for enamelled wire.

In H1 2024, copper prices continuously hit new highs, which inhibited orders in the enamelled wire industry to some extent. However, the overall performance of the industry was decent. According to a survey of producers, orders for copper enamelled wire in H1 were better than expected, mainly due to the excellent production and sales of white goods and a significant increase in export orders for enamelled wire.

Household appliances: In H1 2024, the production of China's three major white goods continued to grow rapidly despite the high base from last year. According to SMM data, in H1, China's production of household refrigerators, washing machines, and air conditioners grew at a rate of 9.7%, 6.8%, and 15.24% YoY, respectively.

The exports of enamelled wire increased significantly in H1. According to customs data, H1 exports of enamelled wire reached 55,525.67 mt, exceeding 13,996.39 mt last year, setting a new historical high.

SMM data showed that in H1, China's total automobile production was 13.89 million units, up 4.9% YoY; the production of NEVs was 4.93 million units, up 30% YoY, with a market share of 35.2%. In recent years, with the continuous growth in the penetration rate of NEVs, the demand for enamelled flat wire has also been increasing. According to SMM, the current domestic demand for enamelled flat wire performs well, with leading producers maintaining stable operating rates. However, with the continuous expansion of flat wire capacity, market competition has become increasingly fierce this year, leading to a significant decline in bidding prices by car companies and a drop in processing fees for enamelled flat wire.

Overall, in H1, the enamelled wire industry benefited from a significant increase in export orders and excellent production and sales performance of household appliances, with demand exceeding expectations. However, the industry still faces oversupply, with severe competition in processing fees. Additionally, the limited recovery in the real estate market and weak domestic demand have led to tight collection of receivables for downstream companies, extending payment periods and continuously squeezing profits of enamelled wire producers. According to an SMM survey, export orders for enamelled wire are expected to continue growing in H2, but household appliance production and sales are expected to grow at a slower pace in a year-on-year manner. Additionally, the demand growth in sectors such as industrial motors and electric tools is also limited. Therefore, orders in the enamelled wire industry may decline in H2.