Operating rate of copper wire and cable enterprises continues to decline, while downstream demand gradually weakens [SMM Weekly Review of Wire and Cable Market]

       This week (5.3-6.5), the operating rate of SMM copper wire and cable enterprises was 76.08%, down 2.59 percentage points MoM, up 2.09 percentage points YoY, and 1.02 percentage points higher than expected. The decline in the operating rate this week was attributed to the fact that the orders on hand of enterprises had been basically exhausted, while new orders failed to effectively connect and provide continuous support. The end-use market was slightly weak, coupled with the consistently high copper prices. Under the combined influence of these two factors, the operating rate of copper wire and cable enterprises continued to decline this week. From the perspective of inventory, affected by the generally tight financial conditions and insufficient enthusiasm for cargo pick-up among downstream customers, the finished product inventories of sample enterprises this week reached 22,060 mt, up 7.35% MoM, while raw material inventories reached 16,630 mt, down 5.24% MoM. This indicates that most enterprises are cautiously observing the future trend of copper prices, and the industry generally adopts a conservative strategy for raw material stocking. Observing by industry, enterprises generally reported that orders from the State Grid Corporation of China and China Southern Power Grid remained stable, while demand in other industries mostly showed a weakening trend. According to SMM, the orders on hand and new orders of enterprises are gradually weakening, with some enterprises indicating that their new order increments decreased by about 10% MoM this week. Affected by the continuous weakening of downstream demand, SMM expects that the operating rate of copper wire and cable enterprises will decline by 1.26 percentage points MoM to 74.83% next week (6.6-6.12), 1.08 percentage points lower than the same period last year.