After the holiday, the operating rate of copper wire and cable companies significantly declined [SMM Analysis]

This week (10.4-10.10), the operating rate of SMM copper wire and cable companies was 83.25%, down 8.71 percentage points compared to the last week before the holiday (9.20-9.26), and 4.34 percentage points below the expected rate. The rise in copper prices before the holiday had already affected some wire and cable companies' orders. Although copper prices fell after the holiday, they remained high, leading to a strong wait-and-see sentiment among downstream companies. Many companies reported that the growth rate of new orders slowed after the holiday, impacting production. From an industry perspective, some companies informed SMM that previously strong State Grid orders also showed signs of slowing recently. Overall, orders across various downstream industries were affected to varying degrees.

This week, SMM copper wire and cable sample companies recorded raw material and finished product inventories of 22,150 mt and 20,240 mt, respectively. Raw material inventory decreased by 37.34%, while finished product inventory increased by 6.88% compared to before the holiday. After the holiday, raw material levels have mostly returned to normal, but finished product inventories remain higher than usual, indicating a slowdown in downstream companies' pickup speed.

SMM believes that current market demand is struggling against the impact of high copper prices. In the short term, copper prices remain a key factor affecting company orders. SMM expects the operating rate of copper wire and cable companies to increase by 0.77 percentage points WoW to 84.02% next week (10.11-10.17), indicating a lack of strong confidence in the market outlook.