Copper Prices Rose This Week, Orders Diverged Among Companies [SMM Analysis]

This week (Sep 13-Sep 19), the operating rate of SMM copper wire and cable companies was 94.88%, down 2.11 percentage points WoW, and 1.58 percentage points lower than the expected operating rate. Copper prices fluctuated upward this week, and wire and cable companies showed significant differences in order performance. For large companies, their order structure remained stable with ample orders on hand, and their production pace and customer orders were not affected this week. However, for most small and medium-sized enterprises (SMEs), the rise in copper prices led most customers to adopt a wait-and-see attitude, with some small enterprises having to offer discounts to secure orders. Additionally, large companies were generally optimistic about future orders, believing that as the National Day holiday approaches, there will still be demand for market stocking, and the impact of rising copper prices is weakening. However, the concerns of SMEs were evident, with most still believing that demand was insufficient and significantly affected by copper price fluctuations. Overall, as copper prices rose, the market faced renewed challenges, and the divergence in order performance among wire and cable companies became more pronounced.

This week, the raw material and finished product inventories of SMM copper wire and cable sample companies recorded 23,250 mt and 17,440 mt, respectively, down 4.63% and 1.75% WoW. The main reason was that after copper prices rose this week, companies slowed down their raw material procurement, while some large companies had sufficient orders, and the downstream pick-up speed was not affected.

Currently, SMM believes that market demand is still in a process of steady growth, but the limited increase is mostly reflected in large companies. Although SMEs find it difficult to see growth, they can still maintain stability, indicating that downstream demand resilience still exists. After the rise in copper prices this week, some orders in the market were delayed, but companies expect some release next week. Therefore, SMM expects that the operating rate of copper wire and cable companies will increase by 0.65 percentage points WoW to 95.53% next week (Sep 20-Sep 26).