Copper Prices' Surge Suppressed New Orders, Copper Wire and Cable Operating Rate Declined Under Pressure This Week [SMM Wire and Cable Market Weekly Review]

      This week (August 29-September 4), the operating rate of SMM copper wire and cable enterprises stood at 66.75%, down 1.05 percentage points MoM and 29.18 percentage points YoY, missing expectations by 2.52 percentage points. This performance was mainly affected by copper price fluctuations, as prices broke through 80,000 yuan/mt in the first week of September, directly suppressing new orders. Most enterprises previously held optimistic expectations for the first week of September, but the surge in copper prices shattered these projections. Coupled with the fact that orders on hand were nearly completed at the beginning of the month—a critical period requiring new orders to maintain production continuity—some enterprises grew cautious about the market outlook for the remainder of September. By sector, the dampening effect of high copper prices on demand was pronounced this week, with generally mediocre performance across most segments. The submarine cable sector maintained stable production schedules, emerging as one of the few steady performers. Even the State Grid sector, typically resilient in demand, underperformed compared to previous periods, with weaker demand release. The PV and construction sectors continued their lackluster trends, showing no significant improvement in demand. Inventory side, the raw material inventory/output ratio of sampled enterprises fell 2.48 percentage points to 14,550 mt, as most firms prioritized consuming existing stockpiles during the copper price rally. Only after prices pulled back on Thursday did some enterprises resume spot procurement. Meanwhile, finished product inventories continued to accumulate, with the ratio rising 2.55 percentage points to 20,140 mt. This buildup was driven by both specialized order requirements necessitating stockpiling and slower cargo pick-up by downstream buyers. Looking ahead, short-term market conditions may improve as copper prices retreat. With prices dropping below 80,000 yuan/mt, downstream acceptance of current levels is gradually increasing, and previously deferred short-term orders are expected to materialize. SMM thus forecasts the operating rate of copper wire and cable enterprises to rise to 67.75% next week (September 5-11).