High Copper Prices Weigh on Demand, Enamelled Wire Industry Continues to Be Sluggish [SMM Enamelled Wire Market Weekly Review]

       This week, the machine operating rate in the enamelled wire industry rebounded by 0.53 percentage points to 75.73% MoM. Mid-week, copper prices pulled back at certain stages, stimulating downstream demand for small-volume orders, which drove the weekly new orders up by 2.42 percentage points. However, overall industry activity remained at a low level. At the same time, affected by the current market environment, enamelled wire enterprises generally adopted the business strategy of "producing based on demand and controlling inventory" to avoid inventory risks, resulting in the days of inventories for finished products continuing to drop to 9.73 days. From an overall industry perspective, high copper prices remain the core factor restricting order releases: on one hand, price transmission along the industry chain is hindered, making it difficult for end-users to accept finished product price increases caused by sharp rises in raw material costs, leading to slow progress on previously signed orders; on the other hand, downstream sectors are still focused on digesting existing inventory, making only small purchases when there is actual demand. Additionally, end-users' ideal expectation for copper prices remains around 80,000 yuan per mt, which is significantly different from current copper prices, further suppressing demand release and keeping enamelled wire demand far below the level of the same period last year. Overall, copper prices are unlikely to see a significant pullback in the short term. The industry is expected to maintain a pattern of "slight fluctuations in operating rates and mediocre orders," with no clear momentum for demand recovery in the near term. The industry's machine operating rate is expected to remain at a low level next week, reaching 75.87%.