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With the rapid growth of China's economy and accelerated industrialization, the market size of enamelled wire has been continuously expanding, attracting numerous enterprises to enter the industry, leading to a rapid expansion of capacity. However, the excessive expansion has resulted in a passive supply-demand imbalance. According to SMM data, by 2024, China's enamelled wire industry capacity had exceeded 3.74 million mt, while annual demand was approximately 2.4 million mt, with an annual capacity utilisation rate of only 64%.
Data Source: Compiled by SMM
The surplus in capacity has intensified the industry's "cut-throat competition." In the enamelled round wire sector, the number of enterprises is large, and product homogenization is severe. To secure a share of the limited market, competition among enterprises has evolved into fierce "cut-throat competition." Enamelled wire companies have adopted strategies such as "extending payment terms" and "reducing processing fees" to exchange profits for volume to maintain production, plunging the industry into a vicious cycle of low-level competition.
Over the past year, the enamelled wire market experienced fluctuations in orders. Affected by the sluggish real estate sector, domestic demand for traditional enamelled wire declined significantly. However, thanks to the strong performance of the end-user home appliance and auto parts industries, as well as the increase in export orders, the enamelled wire market performed better than expected. Specifically:
Booming Home Appliance Production and Sales Boost Enamelled Wire Orders
Home appliances are one of the main downstream application fields of enamelled wire, accounting for 30% of its consumption. In 2024, China's three major home appliances (refrigerators, washing machines, and air conditioners) continued to achieve rapid growth despite a high base from the previous year. From January to December, the cumulative YoY growth rate of refrigerator production reached 8.3%, washing machines 68.8%, and air conditioners as high as 19.5%. Exports also performed well, with washing machine export volume reaching 32.86 million units (up 14.2% YoY), refrigerator exports at 80.32 million units (up 19.7% YoY), and household air conditioner exports at 85.004 million units (up 28.3% YoY).
The implementation of the trade-in policy for home appliances stimulated consumer purchasing enthusiasm, driving the production and sales of refrigerators, washing machines, and other appliances. Meanwhile, air conditioner manufacturers actively shifted to export markets amid weak domestic sales, resulting in better-than-expected export growth. As an indispensable raw material in air conditioner compressors, refrigerator refrigeration compressors, and washing machine motors, enamelled wire orders grew rapidly alongside the booming home appliance market. Throughout the year, the home appliance market significantly supported the demand for enamelled wire.
Robust Automotive Industry Drives Steady Growth in Enamelled Wire Demand
Enamelled wire is closely linked to the automotive industry, being widely used in wiper motors, motor drives, window regulators, relays, drive motors, and NEV charging piles. In recent years, with the rise of NEVs, automobile production and sales have grown rapidly. According to CAAM, in 2024, China's cumulative automobile production and sales reached 31.282 million units and 31.436 million units, up 3.7% and 4.5% YoY, respectively. Among them, NEV production and sales totaled 12.888 million units and 12.866 million units, up 34.4% and 35.5% YoY, respectively, with NEV sales accounting for 40.9% of total new car sales.
As NEV penetration continues to rise, the demand for enamelled flat wire is also increasing. Currently, domestic demand for enamelled flat wire is performing well, with top-tier enterprises maintaining stable operating rates. However, as flat wire capacity continues to expand, market competition has intensified, leading to a significant decline in automaker tender prices and a drop in enamelled flat wire processing fees. Despite this, the robust development of the NEV industry continues to bring enormous potential and opportunities to the enamelled wire market.
Impressive Export Performance Sets New Record
In 2024, driven by demand boost and the "rush to export" trend, China's enamelled wire exports achieved remarkable results. Customs data shows that in 2024, China exported a total of 118,361.91 mt of copper enamelled wire, up 29.57% YoY (HS code 85441100). Among the main export destinations, Vietnam, Japan, and Thailand remained the top three, accounting for 40% of China's total copper enamelled wire exports. The record-high export volume significantly contributed to the improvement of annual operating rates.
Currently, the enamelled wire industry is facing severe challenges. Against the backdrop of rapid industry expansion, the issue of overcapacity has become increasingly prominent, and competition among enterprises has intensified. This has directly led to a continuous decline in processing fees and a severe compression of profit margins. Additionally, the extension of order payment terms has posed significant challenges to enterprises' cash flow management. Nevertheless, despite the overall difficulties in the enamelled wire industry, opportunities still exist. SMM believes that although the growth rate of home appliance industry orders may slow this year, the incremental growth remains promising. The auto parts industry also has a positive outlook. Currently, the automotive industry is rapidly advancing toward new energy and intelligentization, bringing vast opportunities to the enamelled wire market. In the near future, it will become a core driving force for the development of the enamelled wire industry. Furthermore, high-end fields such as intelligent robotics also present a promising development direction for the enamelled wire industry. The precise motors and electronic components inside intelligent robots demand high performance and quality from enamelled wire, providing opportunities for enamelled wire enterprises to explore high-end markets.
