Operating Rates of Enamelled Wire Increased Both YoY and MoM in April, with Pessimistic Sentiment in May Due to Tariff Shadow

According to SMM, the composite operating rate of the enamelled wire industry was 76.79% in April, up 2.42 percentage points MoM and up 6.51 percentage points YoY. Among them, the operating rate of large enterprises was 80.37%, that of medium-sized enterprises was 70.14%, and that of small enterprises was 74.29%.

Copper prices plummeted after the Qingming Festival, prompting downstream customers to restock heavily at lower prices, leading to a surge in orders. Orders for the week surged more than four to five times the usual level, with the enamelled wire industry showing remarkable order performance in the first half of April. However, as copper prices rebounded and stabilized in the latter half of the month, order volumes returned to normal levels. Additionally, the impact of tariffs expanded, weakening demand for enamelled wire in downstream industrial motors, end-user home appliances, and power tools. Despite a gradual decline in order volumes after mid-month, enterprises maintained full production schedules and high machine operating rates, supported by ample order reserves accumulated in the first half of the month. The industry's operating rate exceeded expectations, showing significant growth.

In April, enamelled wire enterprises' raw material inventory/output ratio was 11.38%, down 0.07 percentage point MoM, while the finished product inventory/output ratio was 30.20%, down 0.09 percentage point MoM. Both raw material and finished product inventories of enamelled wire enterprises remained at normal levels in April.

The operating rate of the enamelled wire industry is expected to be 69.81% in May, down 6.98 percentage points MoM and up 0.77 percentage point YoY.

Entering May, orders in the enamelled wire industry have shown a downward trend. According to SMM, the inhibitory effect of the current tariff policy on consumer demand is gradually being released. In the first week after the Labour Day holiday, new orders in the industry plummeted, with major manufacturers generally experiencing a 5%-15% decline in new orders compared to the previous period. Small and medium-sized enterprises were hit even harder, with some seeing order reductions exceeding 30%. SMM predicts that, given that the enamelled wire industry is set to enter the traditional off-season in the latter half of May, coupled with the ongoing tariff dispute, the industry's off-season may arrive earlier under dual pressures. The overall order situation for the enamelled wire industry in May is not optimistic, and market expectations are rather pessimistic.