China Enamelled Wire Industry Struggles Amid Copper Price Surge

The enamelled wire industry in China has been struggling to maintain its operating rate due to several factors. According to data from Shanghai Metals Market (SMM), the comprehensive operating rate of the industry in July was 69.97%, down 1.99 percentage points month-over-month and up 2.72 percentage points year-over-year.

The industry's production schedules slowed down during its traditional off-season, which normally occurs between mid-July and early August. This led to weaker demand and procurement from end-users, resulting in a decrease in operating rates. The sharp rise in copper prices in mid-to-late July also contributed to the decline, as downstream buyers became more cautious and only made sporadic purchases for rigid demand.

As a result of weaker orders and reduced production schedules, shipments slowed down, and enamelled wire enterprises actively cut back on their production. However, finished product inventories remained slightly elevated, with an average days of inventory standing at 11.59 days in July.

SMM forecasts that the operating rate will continue to decline in August, reaching a level of 67.87%, which is down 1.9 percentage points month-over-month and up 1.32 percentage points year-over-year. The industry is expected to remain under pressure due to the continued rise in copper prices and weak rigid demand orders.