Chinese New Year Holiday Arrives, Operating Rate of Copper Wire and Cable Enterprises Drops Sharply [SMM Analysis]

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       This week (1.17-1.23), the operating rate of SMM copper wire and cable enterprises was 42.84%, down 18.1 percentage points MoM, 12 percentage points lower YoY, and 8.84 percentage points higher than the week before Chinese New Year last year. This was mainly due to the impact of the statistical cycle, which caused significant numerical differences. This week, most copper wire and cable enterprises began to gradually suspend operations for the holiday, leading to a noticeable decline in demand for copper used in production. Most enterprises only maintained small-scale production to sustain routine inventories, while downstream pickup volume was less than ideal.

Data Source: SMM

       This week, raw material inventories of sampled copper wire and cable enterprises decreased by 0.71% MoM to 20,920 mt, while finished product inventories increased by 5.38% to 19,400 mt. The growth in finished product inventories was mainly influenced by production inventories of certain enterprises.

       SMM expects the operating rate of copper wire and cable enterprises to decline by 40.29 percentage points to 2.55% next week (1.24-1.30), which will be 1.55 percentage points lower than the Chinese New Year week last year. Next week, the copper wire and cable industry will almost entirely enter a holiday state, with only a few enterprises maintaining low-level production. Regarding post-Chinese New Year orders, the market holds a relatively cautious outlook. By sector, most enterprises remain optimistic about orders from the State Grid Corporation of China, but opinions on new energy power generation, especially PV orders, are divided. Some customers believe that 2025, as the final year of the "14th Five-Year Plan," will see a surge in activity, while others think the PV market has already reached saturation, and growth may slow. Overall, the market in 2025 still faces numerous challenges.