Off-season characteristics emerge, operating rate of enamelled wire industry declines

According to SMM, the composite operating rate of the enamelled wire industry was 72.26% in May, down 4.53 percentage points MoM and up 3.22 percentage points YoY. Among them, the operating rate of large enterprises was 74.91%, that of medium-sized enterprises was 67.16%, and that of small enterprises was 70.88%.

The operating rate of the enamelled wire industry declined as expected in May, but the decline was smaller than anticipated. Specifically: Firstly, the Labour Day holiday disrupted the industry's production rhythm, prompting some enterprises to take holidays or implement production cuts, directly lowering the overall operating rate for the month. Secondly, the inhibitory effect of the tariff hike policy on market consumption demand gradually emerged, with end-use demand declining, leading to a continuous drop in new orders for the enamelled wire industry. Even if the tariff hike policy is temporarily suspended, it would be difficult to make up for the losses incurred earlier. Additionally, with copper prices remaining high, downstream procurement sentiment was low, compounded by the arrival of the industry's traditional off-season. These dual factors further weakened market order demand. However, the decline in the operating rate was narrower than predicted. This is because most enterprises had sufficient order volumes in April, and even with a sharp drop in new orders in May, they were still busy scheduling production for backlog orders from April, enabling the operating rate to remain at a relatively high level, thereby effectively buffering the decline in the operating rate.

In May, the raw material inventory/output ratio of enamelled wire enterprises was 12.08%, up 0.7 percentage points MoM, while the finished product inventory/output ratio was 33.36%, up 3.17 percentage points MoM. The finished product inventories of enamelled wire enterprises increased in May, mainly due to poor recent order performance. However, the current total inventory volume remained within the normal historical fluctuation range.

The enamelled wire industry officially entered the traditional consumption off-season in June, with industry orders continuing to perform poorly recently. According to SMM, current downstream demand is showing a significant contraction, with particularly notable declines in demand from major application areas such as industrial motors and home appliance panels. Enamelled wire enterprises generally reported that the MoM decline in order volumes in June is expected to exceed 10%, with some enterprises already responding to market changes by controlling inventory and adjusting production rhythms. SMM's forecast data indicates that the operating rate of the enamelled wire industry in June is expected to be 67.76%, down 4.5 percentage points MoM, with a YoY decline of 0.89 percentage points.