SMM

       This week (July 25-31), the operating rate of SMM copper wire and cable enterprises stood at 67.34%, down 3.49 percentage points MoM and 24.16 percentage points YoY, falling short of expectations by 2.96 percentage points. Specifically, despite a pullback in copper prices this week, they remained in a high-price range. Most downstream enterprises held bearish expectations, coupled with sluggish consumer sentiment at month-end, leading to conservative order placement and procurement, which directly dragged down the operating rate. The YoY decline further widened to 24 percentage points, primarily due to the high copper prices pulling back from highs last year, stimulating demand release, and resulting in an operating rate as high as 91.5%, creating a significant gap with the current level. In terms of inventory, influenced by enterprises' bearish outlook on copper prices, raw material procurement was mainly to meet immediate needs, with cautious purchasing. This week, the raw material inventory of sample enterprises decreased by 0.13% MoM, recording 15,070 mt. Meanwhile, due to financial constraints, downstream enterprises showed insufficient enthusiasm for cargo pick-up, leading to a 2.81% MoM increase in finished product inventories, reaching 20,090 mt. By industry, this week fell within the traditional off-season, coupled with downstream enterprises' bearish expectations on copper prices, resulting in mediocre performance in industry orders. However, after copper prices pulled back yesterday, some scattered small orders emerged in the market, and production schedules have been arranged for next week. Therefore, SMM expects the operating rate of copper wire and cable enterprises to narrow its MoM decline to 1.13 percentage points next week (August 1-7), reaching 66.2%, with the YoY decline further widening to 26.09 percentage points.