Focusing on the Enamelled Copper Wire Industry: Peak Season in Progress, How Will Tariff Policies Impact? [SMM Analysis]

In April, frequent changes in tariff policies caused copper prices to fluctuate dramatically, resembling a roller coaster ride. So, how did the industry orders for enamelled wire perform? Were corporate orders affected by the changes in tariff policies? The SMM copper team conducted a survey of some enamelled wire companies, and the specific details are as follows:

Company A: April remains the traditional peak season for the enamelled wire industry. Currently, the total orders for April are expected to remain strong. When copper prices fell at the beginning of the month, downstream orders surged. The tariff policies had little impact on the company, mainly due to different customer groups, with a focus on domestic sales.

Company B: Orders from home appliance companies were good, but industrial motors fell short of expectations. Production and sales in April are expected to remain at normal levels.

Company C: The company exports very little enamelled wire directly to the US, with Southeast Asia being the primary market. Additionally, copper products are still exempt from tariffs, so there is no impact at present. However, the application scope of enamelled wire is vast, and the production and sales of end-use products such as automobiles, power tools, and home appliances will affect the demand for enamelled wire.

Company D: Downstream orders were decent, and the company is confident about April. However, recent tariff policies are concerning. Downstream home appliance customers still account for a significant portion, and although no order reductions have been felt yet, US tariff policies will prevent domestic home appliances from being exported to the US, raising concerns about future consumption.

Company E: In March, the production and sales of enamelled wire hit a record high, mainly due to the company's business model and favorable market conditions. Demand across various sectors seems to be growing. After the Qingming Festival, copper prices plummeted, leading to a surge in downstream orders. The number of orders taken in three working days was more than three times the usual amount. High operating rates are expected to continue in April. Tariff policies have had little impact so far.

Company F: The fluctuation in copper prices had a noticeable impact on orders. April orders were not very stable, with some days seeing orders equivalent to three or even four days' worth. However, orders stabilized after copper prices rose. Overall, orders on hand are still sufficient, and demand for end-use home appliances and automotive micro-motors remains strong. No order declines due to tariffs have been felt yet.

Company G: Orders have been relatively stable, with many large downstream customers. A significant portion of customers settle at average prices. When copper prices rose in mid-March, customers settling at the previous month's average price took the opportunity to increase orders, depleting April's demand in advance. However, copper prices fell sharply at the end of March, making the high average price of March unacceptable to customers settling at monthly averages. Recent orders have significantly dropped compared to March, but this is due to the company's settlement method. Orders are expected to return to normal in May. Demand side, recent demand from the home appliance sector remains stable, but two-wheeler orders have declined. Although the impact of tariffs has not yet been felt, there are concerns about future demand for end-use products.

Company H: Orders for flat wires used in transformers have always been stable. After the sharp drop in copper prices in April, downstream orders surged, with three days' worth of orders exceeding four times the usual amount. The production schedule is already booked until June. Transformer exports are also substantial. Currently, orders do not directly reflect the impact of tariffs, but the future situation is not optimistic.

Company I: No direct impact of tariffs on the enamelled wire industry has been felt yet. However, the downstream involves the power tool industry, and the US is China's largest export destination for power tools. Based on the current situation, significant impacts are inevitable in the future, raising concerns about potential order declines.

Company J: The downstream home appliance industry accounts for a large portion. Downstream home appliance orders performed well in Q1, and high operating rates are expected to continue in April. Concerns about tariffs remain. Both black and white goods manufacturers have reported that orders originally planned for the US have been canceled or delayed due to high tariffs. Although the volume is relatively small, it will undoubtedly be detrimental to consumption in the long run, eventually affecting the enamelled wire sector.

Overall, the enamelled wire industry remains in its peak season as it enters April. According to SMM data, the operating rate of the enamelled wire industry is expected to reach 73.45% in April, up 3.17 percentage points YoY. From the enterprise side, it is learned that when copper prices fell in early April, orders surged. Although the subsequent rise in copper prices led to a decrease in orders, the overall order intake remains at a relatively high level, keeping the production schedule of the enamelled wire industry at a high level in April.

Regarding tariffs, according to customs data, in 2024, the proportions of air conditioners, freezers, refrigerators, and washing machines exported from China to the US in their respective categories were 7.8%, 17.7%, 14.7%, and 4.8%. The proportion of some handheld power tools exported to the US reached 17.19%. As key downstream sectors of the enamelled wire industry, home appliances and power tools account for about 38% of the demand structure in the enamelled wire market, and their production and sales will directly affect the market demand for enamelled wire. Based on feedback from current enamelled wire enterprises, most companies report that although orders from some downstream motor factories have slightly decreased, the overall order volume remains moderate at this stage, and no significant impact has been felt. However, there is widespread concern within the industry about the future trends of the consumer market.