Operating Rate Edged Up 0.13 Percentage Points, Industry's Weak Recovery Continues [SMM Enamelled Wire Market Weekly Review]

       This week, the enamelled wire industry exhibited the characteristics of "a slight increase in operating rates and new orders under pressure," with high copper prices continuing to disrupt the recovery pace. Operating rate-wise, benefiting from moderate order intake last week and support from previous orders at downstream enterprises, the operating rate continued to rebound to 77.93% WoW. However, the rebound fell short of expectations, increasing by only 0.13 percentage points MoM, with momentum significantly weakening compared to last week, reflecting a lack of strong support for production-side growth. High copper prices notably constrained demand, suppressing downstream purchase willingness, and new orders fell by 1.07 percentage points MoM. Inventory-wise, days of inventories for finished products dropped by 10.03 days WoW, with pressure slightly easing but still remaining in a relatively high range, as some enterprises still face certain inventory digestion pressure. It is worth noting that the inventory pullback stemmed from short-term destocking due to previous order deliveries, rather than a surge in end-use demand. Further improvement still relies on a substantial recovery in demand. Overall, in the short term, against the backdrop of ineffective demand expansion downstream and copper prices fluctuating at highs, the enamelled wire industry will maintain a "weak recovery" trend. Looking ahead to next week, pre-National Day stockpiling may drive phased restocking downstream, and the operating rate is expected to continue rebounding to 78.27%. However, stockpiling production could also lead to a simultaneous increase in inventory. It is necessary to be cautious, as against the current backdrop of no significant improvement in demand, some enterprises have planned to delay National Day holidays, adjusting production pace to avoid excessive inventory accumulation, which reflects a cautious attitude toward the short-term market.