Copper Prices Unexpectedly Surge, Operating Rates Decline Instead of Rising [SMM Enamelled Wire Market Weekly Review]

       This week, the operating rate of machinery in the enamelled wire industry failed to sustain its rebound, dropping 0.2 percentage points MoM to 77.73%, while new orders also fell 0.81 percentage points MoM. The unexpected surge in copper prices on Thursday became a key factor disrupting the anticipated recovery in the operating rate. According to SMM, copper prices breaking through 82,000 yuan/mt directly disrupted the downstream enterprises' pre-holiday stockpiling rhythm. Unable to bear the cost pressure brought by the sharp rise in copper prices, downstream enterprises exhibited strong wait-and-see sentiment, with some even planning to extend the National Day holiday. Orders at enamelled wire enterprises plummeted that day, and market transaction atmosphere was sluggish. Inventory side, pre-holiday raw material and finished product inventories showed a pattern of "one increasing, one decreasing." On the raw material side, driven by conventional needs for pre-holiday production security, enamelled wire enterprises increased stockpiling efforts as usual, leading to an increase in days of raw material inventories to 2.56 days. Finished product inventories decreased to 9.98 days, mainly because enamelled wire enterprises proactively adjusted the production pace to control inventory, coupled with downstream customers accelerating cargo pick-up for previous orders. Looking ahead to next week, with only two trading days left before the National Day holiday, high copper prices are significantly suppressing end-user demand. It is possible that individual enamelled wire enterprises may plan early holidays. SMM expects the operating rate of machinery in the enamelled wire industry to pull back to 73.53% next week.