Spot Premiums Edge Up, Market Recovers Somewhat [SMM North China Spot Copper]

According to SMM, by the end of May, contradictions between weak orders and rising inventories had already emerged in the market. In June, as the end-use off-season deepens, high copper prices further disrupt market purchasing sentiment. At the beginning of the period, enterprises proactively lowered operating rates and tightened production schedules to digest previously accumulated inventories. While demand in the power and new energy sectors remains resilient, the incremental gains cannot offset the decline in conventional end-use demand. The demand side is unlikely to see a substantive recovery in the short term. SMM expects the industry's operating rate to continue its pullback trend in June.

According to SMM, in May, constrained by multiple factors such as the Labour Day holiday disruption, weak demand from home appliances, and copper prices fluctuating at highs, the operating rate of the enamelled wire industry pulled back 3 percentage points MoM. Currently, structural divergence on the demand side continues. Rigid demand from the new energy and power sectors remains steady, providing bottom support for the industry. However, the home appliance sector remains persistently weak, traditional end-user segments lack incremental rigid demand, and downstream end-users are highly sensitive to copper prices. Copper price fluctuations suppress purchase willingness, further dragging on order growth.

According to SMM, the comprehensive operating rate of the enamelled wire industry in May was 72.32%, down 3.00 percentage points MoM but up a marginal 0.06 percentage points YoY. Among them, the operating rate of large enterprises was 77.24%, medium-sized enterprises was 59.65%, and small enterprises was 68.78%.