This week (5.9-5.15), the operating rate of SMM copper wire and cable enterprises was 83.39%, down 0.1 percentage point WoW and up 3.57 percentage points YoY, which was 2.86 percentage points lower than the expected operating rate. According to SMM, the current production of enterprises mainly relies on previous orders on hand, and the copper consumption in production has not been significantly affected. However, the significant fluctuations in copper prices this week have had a clear inhibitory effect on the new orders of enterprises. Multiple enterprises have indicated that the increase in new orders this week has decreased WoW, with low market purchase willingness and extreme caution towards the fluctuating copper prices. Currently, enterprises are concerned that the growth of new orders will drag down the operating rate in June. From the inventory perspective, the raw material inventory of SMM copper wire and cable enterprises this week was recorded at 17,930 mt, down 2.18% WoW, indicating low purchase willingness of enterprises amid high copper prices. In contrast, the finished product inventory increased by 4.6% MoM to 19,550 mt, suggesting a slowdown in the cargo pick-up speed of downstream enterprises. Given the high uncertainty in current copper prices and the less-than-ideal growth in market demand, copper wire and cable enterprises do not expect an improvement in the next week. SMM forecasts that the operating rate of copper wire and cable enterprises will only increase by 0.59 percentage point WoW to 83.98% next week (5.16-5.22), and will increase by 8.11 percentage points YoY.
