Operating Rates of Copper Wire and Cable Producers Fell WoW This Week, High Copper Prices Suppressed Downstream Demand [SMM Wire and Cable Market Weekly Review]

      This week (September 12-18), the operating rate of SMM copper wire and cable enterprises was 65.84%, down 1.78 percentage points MoM and 29.04 percentage points YoY, 1.66 percentage points lower than expected. The main reason was that copper prices broke through 81,000 yuan/mt and continued to fluctuate at highs, significantly dampening overall downstream purchase willingness and reducing new orders for enterprises. Only a few downstream players showed a "rush to buy amid continuous price rise and hold back amid price downturn" trend, with orders increasing when copper prices rose at the beginning of the week but decreasing after copper prices retreated on Thursday. Overall downstream demand remained weak. By sector, all sectors were sluggish this week due to high copper prices: orders from State Grid, which previously supported the industry, continued the mediocre trend from last week; automotive wiring harness orders remained stable; enterprises expect demand from the construction sector and State Grid orders to be released with a lag until October. Inventory side, current copper prices do not match the order prices on hand for enterprises, so wire and cable enterprises have weak purchase willingness. The raw material inventory/output ratio of sample enterprises fell 2.72 percentage points MoM to 14,290 mt. The finished product inventory/output ratio increased 3.19 percentage points MoM to 21,010 mt, as downstream funding pressure remained tight with no improvement. Looking ahead to next week, some scattered small orders emerged after copper prices retreated on Thursday, and the production schedule for related orders will support the operating rate next week. Therefore, SMM expects the operating rate of copper wire and cable enterprises to rise to 66.67% next week (September 19-25).