Operating Rate Rises as Expected, Short-term Increase in Air Conditioners Cannot Alter Home Appliance Demand Off-Season [SMM Enamelled Wire Market Weekly Review]

This week (6.26-7.2), the operating rate of enamelled wire industry machines rose 1.4 percentage points MoM to 77.80%, in line with earlier expectations. On the one hand, the pullback in copper prices last week boosted order taking, and enterprises raised their production schedules accordingly. On the other hand, some enamelled wire enterprises supporting air conditioner production benefited from a buying spree for air conditioners in Europe, achieving a slight phased increase in orders. However, enterprises generally feedback that the sustainability of this increase was weak, unable to reverse the off-season trend in the home appliance industry, and overall home appliance demand remained sluggish. Coupled with disruptions from mid-year settlement factors, the downstream procurement pace slowed down. This week's weekly order volume pulled back 2.19% MoM, and finished product days of inventories edged up to 8.85 days. As the mid-year settlement period ends, downstream purchase willingness is expected to recover next week. SMM expects the operating rate of enamelled wire industry machines to edge up to 77.93% next week.