Copper Prices Shot Up Amid the Off-Season: How Is the Enamelled Wire Industry Operating? [SMM Analysis]

        The July operating rate pulled back MoM, pressured by the traditional off-season and weighed down by the sharp rise in copper prices. In the industry's traditional off-season, production schedules at end-users slowed, supporting procurement contracted, and the lack of sustained growth in rigid demand formed the basis for the sector's weakness. Meanwhile, in mid-to-late July, copper prices shot up sharply and fluctuated at highs, leading to strong wait-and-see sentiment among downstream buyers, who only made sporadic purchases for rigid demand. Difficulty in landing new orders forced enterprises to cut production schedules, further dragging down the industry’s operating rate.

      On the inventory front, shipments slowed due to weaker orders, and enamelled wire enterprises actively reduced production schedules. However, finished product inventories remained slightly elevated. The industry’s days of finished product inventory stood at 11.59 days, and inventory pressure persisted.

    SMM forecasts the operating rate in August to be 67.87%, down 1.9 percentage points MoM and up 1.32 percentage points YoY. In August, the enamelled wire industry will remain in the traditional demand off-season, with weak support from rigid demand orders. Combined with the continued rise in copper prices magnifying the off-season pressure, the industry is expected to continue its weak operating pattern.