Tariff Adjustments Bring Positive News: Will the Enamelled Wire Industry "Turn the Corner" or "See Through a Glass, Darkly"? [SMM Analysis]

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      Since the beginning of April, the dynamics of the Sino-US tariff policy have continued to attract the attention of the industry. Against this backdrop, the impact on enamelled wire industry orders has become a focal point of concern within the industry. As the traditional off-season for the enamelled wire industry approaches in late May, the market is paying closer attention to consumption expectations for May. The release of the Sino-US joint statement on May 12 undoubtedly brought new variables to the market. Will the order pattern in the enamelled wire industry undergo a new transformation as a result? Focusing on these market hot topics and industry concerns, the SMM copper team conducted an inquiry into the order status of some enamelled wire enterprises. The specific situation is as follows:

Enterprise A: The total orders of the enterprise in April were actually relatively high, but this was due to the growth in orders following the sharp decline in copper prices at the beginning of the month. After mid-April, new orders gradually decreased, and there was a significant drop in orders in the first week after the Labour Day holiday. Five machines have already been shut down. The decrease in new orders has also led to a decline in the machine operation rate, which is related to the decrease in demand caused by the increase in tariffs. The outlook for May is not optimistic. However, after the latest adjustment to the tariff policy, it is beneficial for consumption. Although the impact has not yet been reflected in the current orders, it is expected to improve.

Enterprise B: Previously, some orders from air-conditioning enterprises destined for the US were cancelled. Starting from the end of April, the demand for enamelled wire also declined. With the recent readjustment of the tariff policy, it is generally beneficial for subsequent consumption. However, orders that were previously transferred to Southeast Asia cannot be transferred back in the short term. Therefore, no significant changes in consumption have been felt recently.

Enterprise C: The decline in orders was more pronounced at the end of last month, and orders have also been poor recently. Downstream demand is relatively weak, and copper prices are relatively high. The tariff policy has just been introduced, and no increase in orders has been felt yet. We will have to wait and see how things develop, and the outlook does not seem optimistic.

Enterprise D: Currently, the machine operation rate is still relatively normal. After the adjustment of the tariff policy, some downstream enterprises have indicated that orders from US customers that were previously suspended are now being produced normally. However, delivery dates have not yet been set, and the impact will not be felt at the enamelled wire end in the short term.

Enterprise E: Orders have declined recently. Downstream enterprises are sensitive to copper prices and the beginning of the month. Currently, finished product inventories are slightly high, and no increase in orders has been felt after the tariff adjustment.

Enterprise F: Order performance has been poor since the Labour Day holiday, and there has been no recent increase. The impact of tariffs is not immediate, and there has been no news of a rush to export. Downstream cargo pick-up is also not very active.

Company G: Orders have weakened since late April, and we are relatively pessimistic about May. The positive impact of recent tariff issues on consumption has not yet been reflected. However, orders have improved slightly compared to the period immediately after the holiday.

Company H: After the Labour Day holiday, the operating rate of our machines was adjusted downward and is currently maintained at around 80%. Orders have decreased by approximately 30% compared to normal levels, and finished product inventories have increased. There are relatively few downstream enterprises that directly export. The positive impact of tariffs on end-use consumption will not be reflected until at least one month later.

      Overall, despite the positive signals released by tariff policy adjustments, feedback from enamelled wire enterprises indicates that the actual boost to orders from the current policy has not yet formed a widespread effect. Most enterprises report a lag in order transmission. Coupled with the expectation of high copper prices and the off-season in consumption, the industry still faces significant uncertainties in May. However, it is worth noting that some enterprises have detected signs of "thawing" in downstream terminals. Although this has not yet been transmitted to the enamelled wire sector in the short term, it may inject recovery momentum into the subsequent off-season in consumption.