According to SMM, the composite operating rate of the enamelled wire industry in July was 67.25%, down 2.68 percentage points MoM and 0.54 percentage points YoY. By enterprise size, the operating rate of large enterprises was 65.74%, that of medium-sized enterprises was 70.85%, and that of small enterprises was 67.32%.
SMM believes that the change in the operating rate of the enamelled wire industry in July was the result of the combined effects of the off-season and copper price fluctuations: As an important downstream sector for enamelled wire, the demand in the home appliance industry remained sluggish in July, directly leading to a significant reduction in the procurement volume of related products such as round enamelled wire, becoming the primary factor dragging down the industry's operating rate. Meanwhile, the demand in the industrial motor sector showed mediocre performance, further suppressing the demand for enamelled wire. However, despite the overall market pressure, the demand in the power transformer and electric two-wheeler sectors remained robust, and the demand for rectangular wire products related to NEVs even showed a positive trend. The combined force of these demands alleviated the downward momentum of the industry's operating rate to a certain extent. Additionally, when copper prices experienced periodic pullbacks, downstream enterprises' willingness to restock at low prices significantly increased, leading to an improvement in short-term order volumes and directly boosting the industry's operating rate. This factor made the July operating rate slightly higher than market expectations, buffering the downward pressure brought by weak off-season demand.
From the inventory perspective, enamelled wire enterprises still faced certain sales pressure, with finished product inventories continuing to accumulate mildly at month-end. Data showed that the finished product inventory/output ratio of enamelled wire enterprises in July was 38.79%, up 2.13 percentage points MoM, indicating a slight expansion trend in inventory pressure.
SMM forecasts that the comprehensive operating rate of the enamelled wire industry in August will drop back slightly to 66.79%, down 0.46 percentage points MoM and up 1.37 percentage points YoY, with the industry still in an off-season adjustment cycle. Specifically, August is the traditional off-season for the home appliance industry, coupled with the high-temperature holidays gradually starting at OEMs, production rhythms have slowed down. It is highly probable that orders for home appliance enamelled wire will continue the downward trend, and the dragging effect on the industry's operating rate will continue to manifest. Additionally, the recent US policy of imposing a tariff hike on copper semi-finished products has also sparked widespread concerns among enamelled wire enterprises. Although the proportion of China's enamelled wire exports to the US is less than 6%, for enterprises deeply rooted in the US market, this policy will cause a direct impact, with a significant decline in their US market orders, further suppressing the overall operating momentum of the industry.
