Off-season hits; operating rate of enamelled wire industry pulls back as scheduled in June

According to SMM, the composite operating rate of the enamelled wire industry in June was 69.93%, down 2.33 percentage points MoM and up 1.27 percentage points YoY. Among them, the operating rate of large enterprises was 71.65%, that of medium-sized enterprises was 66.44%, and that of small enterprises was 69.59%.

In June, the enamelled wire industry entered the traditional consumption off-season as scheduled, with a significant weakening in market demand. Industry orders continued to decline, and the operating rate saw a notable drop. According to SMM monitoring data, new orders in the enamelled wire industry began to decrease from mid-May. After entering June, copper prices continued to fluctuate at highs, further suppressing downstream demand and exacerbating the market slump. From the perspective of end-use demand, orders for home appliances entered the off-season first, followed by a decline in demand for industrial motors. These two sectors became the main drivers of the order decline. Not only that, but demand in areas such as NEVs, power transformers, and power tools also showed varying degrees of contraction. Whether it was round wire or flat wire orders, market performance was unsatisfactory.

In June, the raw material inventory/output ratio of enamelled wire enterprises was 12.35%, increasing by 0.27 percentage points MoM. The finished product inventory/output ratio was 36.66%, increasing by 3.29 percentage points MoM. Despite the generally high finished product inventories of enamelled wire enterprises affected by weak downstream demand, the overall inventory volume remained within a reasonable range.

Looking ahead to July, the market situation for the enamelled wire industry remains grim. SMM predicts that the industry's operating rate will continue to decline, dropping to 66.93%, a decrease of 3 percentage points MoM. At the beginning of the month, copper prices once broke through the 80,000 yuan/mt threshold, with downstream enterprises exhibiting strong wait-and-see sentiment. Orders plummeted, and market activity remained low. Multiple enamelled wire enterprises reported a significant decline in orders recently, predicting that the MoM decline in orders for July would exceed 10%. Given the continuous weakening of multiple end-use demand sectors, enamelled wire enterprises generally hold a pessimistic attitude towards order expectations for July. Under the shadow of the off-season, the industry's operating rate will continue to decline.