H2 Consumption Outlook: Optimistic or Pessimistic—Overview of Copper Wire and Cable Downstream Companies Survey [SMM Analysis]

Entering H2, with the decline in copper prices, wire and cable companies have recently seen an increase in orders, and the market holds an optimistic outlook for H2 demand. How did new projects in downstream industries fare in July? What are companies' views on H2 projects? The SMM survey team surveyed downstream industries including power construction, infrastructure construction, building, and real estate development. The latest survey results are summarized as follows:

Company A (Power Construction): Both July and August are high-temperature construction periods, currently affecting construction efficiency, and project progress is not as fast as in previous months. In July, we won a new bid for an ultra-high voltage construction project and remain optimistic about H2.

Company B (Power Construction): The outlook for H2 is quite optimistic. In H1, investment in power grid infrastructure construction increased significantly, and there were many projects related to power and clean energy. Now, in H2, there is a rush to meet deadlines, and the speed of various construction projects is accelerating.

Company C (Infrastructure Construction): Recently, we have been working on previous projects, with no new completed projects or new projects received in July. There should be new projects in H2, but the overall environment is not good this year, and the outlook for H2 is not optimistic. Our economic situation is mediocre, and government policies currently offer limited help.

Company D (Infrastructure Construction): New projects have been starting one after another, with more new projects in September and October, and the overall number of projects has increased. This year, material supply has been stable, but suppliers are unwilling to advance funds, and the owners genuinely lack money, so the construction funds have been tight.

Company E (Infrastructure Construction): High temperatures have little impact on projects, and the construction progress is normal. New projects will increase later, but the overall number of projects is not more than last year. The industry situation is not good, and our situation is also not good either. Raw material prices have fluctuated greatly this year, costs are high, and funds are tight, sometimes making it difficult to ensure our profits. We believe that projects will not improve in the short term, and there is no optimistic outlook for next year.

Company F (Real Estate Development): There are still several new projects in H2, continuing until the end of the year, with almost one new project each month, but the number of projects has indeed decreased. There are fewer bids this year, with high competition pressure and low prices. To win projects, comprehensive strength is required. Our funds are currently tight and are expected to remain tight depending on project conditions.

Company G (Real Estate Development): Project progress has slowed down, significantly affected by the weather. There are no new projects in H2, and the focus is on completing existing projects. Funds are still tight, noticeably different from previous years, such as the speed of settlement, the amount of raw material purchases, and even employee wages have decreased based on project conditions. There will be new projects later, which can connect with existing projects, and there are also completed projects.

Company H (Real Estate Development): The progress of ongoing projects is slightly slower, mainly due to high temperatures and tight funds. We have reduced investment in projects and do not require fast progress. This year's projects are mainly about survival rather than progress. There are no new projects in H2, and project funds are tight.

Company I (Real Estate Development): July sales were worse MoM, and the release of rigid demand was still not ideal. The Ningbo project we are responsible for has not yet started, and sales have not begun, possibly delayed until September. This is due to market conditions and the difficulty of advancing cooperative projects, requiring multi-party coordination. Recent high temperatures have also affected the construction pace to some extent.

Company J (Construction): The bidding pressure is too high this year, with project amounts being very low, and there are certain funding requirements. The outlook for H2 projects is not optimistic, with few new projects. The industry situation is not good, and it feels like it has hit rock bottom, with no significant improvement expected. Funds have always been tight.

Company K (Construction): The industry situation is not good this year, and there is a noticeable decrease in projects in H2, significantly affecting the industry. Even large companies are not immune. After the current projects are completed, there may be no new projects to connect. The overall number of projects this year is less than last year, with few pre-scheduled projects. The funding situation is moderate, but new projects will decrease, and completed projects will increase. There is no optimistic outlook before the end of the year.

Company L (Infrastructure Construction): We have undertaken many national-level projects, which are stable with long construction periods and strict progress control. The number of projects this year is similar to last year, and it does not feel like a large-scale infrastructure construction period yet. There are both domestic and international projects, and the country encourages going abroad, so there are no excessive restrictions on undertaking foreign projects.

According to the survey, the real estate market remains sluggish, and related construction and real estate development companies mostly face tight funds amid poor market conditions, with few new projects and a pessimistic outlook for H2. However, power construction, national-level projects, and affordable housing projects perform decently, with some companies expressing optimism for H2. SMM will continue to pay attention to market conditions and bring you the latest updates.