The operating rates of enamelled wire producers averaged 68.08% in July, up 1.88 percentage points year on year but down 0.9 percentage point month on month due to the poor downstream demand, SMM survey showed. The figure was 0.7 percentage point lower than expected. The average operating rate of large, medium-sized and small enterprises was 69.06%, 68.54% and 59.43% respectively.
The current competition among enamelled round wire companies is intensifying. In the face of overcapacity and insufficient demand, round wire companies lowered prices to ensure the operation and production; in addition, many companies told SMM that downstream delivery-taking slowed down noticeably due to cash flow issues. In terms of industries, it is only heard that orders for new energy vehicles and special transformers were relatively sufficient. One company told SMM that their export orders to the US have fallen by a half, while export orders to Southeast Asia performed better.
Raw material inventory/output ratio was 11.42% in July, a decrease of 0.31 percentage point from the previous month. The finished product inventory/output ratio was 38.56%, up 1.12 percentage points. The current downstream demand is not strong, and the reduction in sales of some enterprises has led to an increase in the inventory of finished products.
It is expected that the operating rate of the enamelled wire industry in August will drop by 1.38 percentage points to 66.70%, which is the lowest level in recent years. Most companies are still not optimistic about orders in August as the traditional off-season continues. Demand is likely to rebound in September. Orders from home appliances will fall remarkably in August amid concentrated shutdowns of manufacturers. Orders from other industries can hardly rise. As such, the operating rates will fall further in August. Notes: SMM surveyed 45 producers with a total capacity of 1.97 million mt/year.
