How does the market perform before the traditional peak season for enamelled wire? [SMM Analysis]

In previous years, October is usually the month when the enamelled wire industry gradually emerges from the traditional off-season and moves towards the traditional peak season. How will the market perform this October? Will the peak season arrive as expected? In this regard, SMM conducted a survey of some enamelled wire companies, and the specific situation is as follows:

Company A: Post-holiday orders have increased, mainly due to the downstream recovery in production and restocking demand. Demand in October seems to be slowly recovering, but it is definitely down compared to the same period in previous years.

Company B: Demand for enamelled wire is still quite mediocre, and the transmission of home appliance stimulus policies to enamelled wire is relatively slow, so the outlook for October is not optimistic.

Company C: This year, post-holiday performance is still not as good as last year. Stimulus policies for home appliances and automobiles are directly beneficial to home appliance manufacturers and car companies, but it takes a long time to transmit to enamelled wire companies. If the real estate sector is not doing well, it is difficult for demand to grow significantly. Post-holiday orders are indeed warming up, but this is mainly because there were few orders during the holiday and downstream stocking in September was not much. The slight drop in copper prices after the holiday led to some release of downstream rigid demand. Overall demand in October feels lower-than-expected, with a sense that the off-season is very dull and the peak season is hard to be prosperous.

Company D: Orders from downstream small home appliance customers are up MoM but down YoY. Additionally, orders for two-wheel and three-wheel electric vehicles are relatively stable. Overall, post-holiday market orders are acceptable, with orders expected to grow MoM from September, but still down YoY. October is not expected to turn into a peak season, with attention on whether copper prices and home appliance consumption can boost demand.

Company E: Recent orders are relatively stable, especially for the new energy sector, which is performing well. The outlook for October remains optimistic.

Company F: Orders in October are expected to improve. The downstream home appliance industry has been in an off-season throughout Q3, and it is expected to gradually turn into a peak season starting in October. Recently, some home appliance companies have already submitted their order demands for October, which is also improving MoM.

Company G: Orders have been very stable, and capacity is already operating at full capacity. Orders for traditional power transformer flat wires have been consistently stable.

Company H: Orders in October are expected to be better than in September. Orders from downstream home appliance customers are improving, but the peak season is not strong, with limited MoM growth and still poor YoY.

Company I: Orders have been poor throughout the year, with a significant decline in Japanese car orders YoY. The National Day holiday was long, and orders in Q4 are also expected to be poor.

According to the latest SMM data, the operating rate of the enamelled wire industry in October is expected to be 63.65%, down 5.29 percentage points from last year, indicating a lack of confidence in consumption for October. Specifically, demand for power transformers and new energy-related end-use sectors is relatively stable. Meanwhile, air conditioner manufacturers will gradually enter the production peak season in October, which will boost enamelled wire orders MoM. However, end-use demand related to the real estate industry, such as industrial motors and pumps, continues to decline YoY, which has a more significant drag on enamelled wire industry orders. Additionally, although stimulus measures like "home appliance subsidies" and "automobile subsidies" have a positive impact on domestic demand, their actual boosting effect on the enamelled wire industry still requires time to manifest.

SMM believes that although the order volume in October has rebounded compared to September, there is still a gap compared to the same period in previous years. The peak season for the enamelled wire industry this year may be delayed, or it may even experience a lackluster peak season.