Copper Prices Pull Back and Resumption of Work Reinforce Each Other; Weekly Operating Rate Rises to 81.07% [SMM Enamelled Wire Market Weekly Review]

        This week (February 27–March 5), the enamelled wire industry saw a strong post-holiday recovery, with the weekly operating rate surging 31.14 percentage points MoM to 81.07%, and industry activity accelerating its shift into the peak season. Early in the week, the center of copper prices moved lower, effectively dispelling downstream wait-and-see sentiment and stimulating downstream willingness to place orders; coupled with the complete dissipation of holiday disruptions, enterprises accelerated the pace of returning to work and resuming production. Weekly new orders surged 90.24% MoM, and the resonance of two factors—“copper price pullback driving rigid demand” and “end-use resumption after the Lantern Festival”—pushed the operating rate to rebound beyond expectations.

       Demand side, orders in the home appliance sector were released in a concentrated manner, becoming the core driver supporting the operating rate at a high level; demand in traditional sectors recovered mildly, with a steady recovery pace; the NEV sector, affected by seasonal factors, saw demand temporarily pull back. Notably, the market has recently developed a “fear of price declines” mentality, with order placements pulling back at the end of the week versus the beginning of the week, and enterprises showing some concern about the sustainability of orders in the latter part of the month. Inventory side, industry finished product inventories fell to 9.32 days of inventories, within the normal range, with a solid pace of destocking.

       Overall, this week saw strong growth in both industry orders and operating activity in the enamelled wire sector. Despite short-term disruptions from cooling order placements at the end of the week, orders on hand remained ample; together with support from the traditional peak-season effect in March, the industry operating rate is expected to continue rebounding to 84.13% next week.