SMM

       This week (June 27 - July 3), the operating rate of SMM copper wire and cable enterprises stood at 67.81%, down 2.37 percentage points MoM and 13.55 percentage points YoY, falling short of expectations by 0.21 percentage points. According to SMM, affected by the traditional consumption off-season, enterprise production mainly relies on support from previous orders. Meanwhile, the copper price breaking through the key level of 80,000 yuan/mt further suppresses downstream purchase willingness, leading to a weakening of new orders MoM. The market generally expects this to continue to suppress the subsequent operating rate. From the inventory perspective, influenced by the dual factors of high copper prices and a declining operating rate, finished product inventories have further pulled back. This week, the finished product inventories of sampled enterprises reached 19,670 mt, down 2.33% MoM. Raw material inventories also showed a simultaneous downward trend, reaching 15,770 mt, down 3.43% MoM. This inventory change trend indicates that, under the current market environment, enterprises are actively controlling inventory levels to cope with cost pressure and the risk of weakening demand. From an industry perspective, high copper prices suppress demand in various fields. The construction industry experiences a decline beyond the off-season, while only the power industry shows relatively stable performance, providing some support for the operating rate. Based on the dual impact of high copper prices and weakening seasonal demand, SMM expects that next week (July 4 - July 10), the operating rate of copper wire and cable enterprises will decline by 0.21 percentage points MoM to 67.21%, 16 percentage points lower than the same period last year.