SMM

      This week, the operating rate of enamelled wire production equipment rose 0.13 percentage points MoM to 77.8%, while new orders increased 1.08 percentage points. The rebound in operating rates and orders was mainly due to a slight recovery in orders from the end-user air conditioning sector, with some enterprises experiencing growth in new orders. Currently, the industry overall continues to face the off-season cycle, downstream demand has not significantly improved, and copper prices have rebounded to over 80,000 yuan/mt, which continues to suppress downstream orders, resulting in generally poor performance in new orders. Inventory side, this week, enterprise finished product inventories stood at 10.2 days of inventories, continuing to fluctuate at highs. Insufficient release of downstream demand amid high copper prices has hindered destocking, and inventory pressure continues to constrain short-term industry operations. Overall, SMM expects the operating rate to continue a slight rebound to 78.47% next week, with core support coming from the anticipated continuation of improving air conditioning demand. However, caution is warranted as the suppression of overall downstream demand by high copper prices has not been lifted. If demand in other downstream sectors does not improve simultaneously, the industry's recovery may be limited, remaining in a sluggish phase of slow recovery.