SMM

      This week (August 22-28), the operating rate of SMM copper wire and cable enterprises was 67.81%, down 1.07 percentage points MoM and 26.83 percentage points YoY, 1.41 percentage points higher than expected. Specifically, the surge in copper prices at the beginning of the week directly suppressed the release of wire and cable orders. Downstream enterprises showed low purchase willingness, with most enterprises relying on completing orders on hand to maintain basic operations. However, a few downstream enterprises, influenced by the "rush to buy amid continuous price rise" mentality and holding a bullish outlook for the market, chose to place orders in advance at the beginning of the week. This, however, did not change the overall weak demand situation. By industry, stable demand from State Grid provided support for operations, while other industries remained in an off-season state. In terms of inventory, the high copper prices at the start of the week led to weak purchase willingness among wire and cable enterprises. After the subsequent decline in copper prices, some enterprises made just-in-time procurement, but mainly through pricing without actual cargo pick-up, leading to a 1.06% MoM decrease in raw material inventory, recording 14,920 mt. Finished product inventories, on the other hand, continued to build up due to financial constraints and reduced pickup volume by downstream enterprises at month-end, increasing 1.81% MoM and recording 19,640 mt. Looking ahead to next week, wire and cable enterprises have a mediocre outlook for the September market, expecting limited recovery in demand, with the traditional September-October peak season possibly delayed, though overall performance is still expected to be better than in August. Therefore, SMM expects the operating rate of copper wire and cable enterprises to rise to 69.27% next week (August 29-September 4).