Off-season in the Industry Deepens, Order Decline Trend Hard to Halt [SMM Enamelled Wire Market Weekly Review]

      This week, the operating rate of enamelled wire industry machinery decreased by 0.2 percentage points MoM to 82.1%, while weekly orders increased by 2.37% MoM. The growth in orders this week was mainly due to short-term replenishment after the impact of the Dragon Boat Festival holiday faded. Excluding the holiday interference, the actual performance of new orders in the industry remained weak. From the perspective of order structure, new orders for most enterprises continued to decline. To match the shrinking demand, enterprises actively reduced the number of operating machinery, leading to a continued decline in the operating rate. In terms of end-use demand, orders for power transformers remained stable, while the home appliance market continued to slump, with a significant decline in order volume. The industrial motor segment also entered the off-season, showing a weakening demand trend. On the inventory side, the days of finished product inventories for enterprises climbed to 9.58 days this week, with a significant MoM increase. An SMM survey showed that sluggish sales led to significantly higher inventories for enterprises. However, most enterprises have promptly adjusted their strategies by slowing down production pace and actively digesting inventories. Overall, the enamelled wire industry has deeply entered the off-season cycle, lacking strong support from the demand side, and the downward trend in orders is difficult to reverse. SMM predicts that the operating rate of machinery and the volume of new orders will continue their current downtrend next week.