According to SMM, in May, the operating rate of copper cathode rod enterprises was 67.55%, down 3.64 percentage points MoM, up 0.13 percentage points from expectations, and down 2.65 percentage points YoY. Among them, the operating rate of large enterprises was 78.48%, medium-sized enterprises was 49.95%, and small enterprises was 64.5%. In May, the operating rate of copper cathode rod enterprises was 67.55%, down 3.64 ppts MoM and down 2.65 ppts YoY (70.26% in May last year). Overall, the performance of the copper cathode rod market in May was similar to that in April. As rising copper prices suppressed purchase willingness among downstream processing enterprises, a strong wait-and-see sentiment prevailed in the market, new orders at copper cathode rod enterprises continued to weaken, and order growth was significantly insufficient. Affected by low purchase willingness among downstream clients and a slowdown in the pace of cargo pick-up, finished product inventories at copper cathode rod enterprises continued to build up. Sluggish new orders, coupled with elevated finished product inventories, weighed on production, causing the overall operating rate of China's copper cathode rod enterprises to pull back significantly in May. By downstream sector, due to the rebound in copper prices, operating rates of wire and cable and enamelled wire enterprises also slipped to varying degrees. In May, days of raw material inventories at copper cathode rod enterprises were 2.06 days, and days of finished product inventories were 3.58 days. After copper prices rebounded, copper cathode rod enterprises turned more cautious in procurement, only purchasing as needed. When copper prices corrected, they restocked as needed, driving days of raw material inventories up by 0.21 days MoM. Meanwhile, orders from downstream wire and cable and enamelled wire enterprises showed mediocre performance, with demand continuing to weaken. The speed of picking up goods slowed down compared with the earlier period, pushing days of finished product inventories up by 0.23 days MoM. The operating rate of copper cathode rod enterprises in June is expected to be 66.59%. Looking forward to June, the operating rate of copper cathode rod enterprises is expected to decline by 0.96 percentage points MoM to 66.59%, and down 3.56 percentage points YoY. Although orders on hand can provide short-term support for production and stage-wise support for operating rates, as the market gradually enters the off-season, end-user demand for cables, enamelled wire and other sectors weakens, coupled with concerns over copper price fluctuations, it was originally expected that the operating rate would continue to trend weak. However, recent market conditions have changed. This week, a sharp pullback in copper prices stimulated concentrated price-based procurement by downstream buyers, leading to a significant increase in new orders for copper cathode rod enterprises, far exceeding earlier expectations. With marginal improvement on the demand side, the industry’s June operating rate has the potential to be revised upward and break through the previously pessimistic forecast.

[SMM Copper Cathode Rod Flash] This week, the operating rate of copper cathode rod producers rose 1.6 percentage points WoW, beating expectations by 6.16 percentage points. The sharp retreat in copper prices spurred concentrated price fixings among downstream wire, cable, and enamelled wire users, and new orders at copper rod mills drove an above-expectation recovery in operating rates. Demand from top-tier wire and cable players rebounded markedly, while enamelled wire orders recorded only a mild improvement, without explosive growth.

During the week, the copper price center pulled back, boosting downstream purchase willingness. New orders in the enamelled wire industry achieved a phased recovery, and enterprise production enthusiasm rose in tandem, driving the weekly operating rate up.

This week (6.5-6.11), the operating rate of enamelled wire industry machines rebounded WoW ....

According to SMM, by the end of May, contradictions between weak orders and rising inventories had already emerged in the market. In June, as the end-use off-season deepens, high copper prices further disrupt market purchasing sentiment. At the beginning of the period, enterprises proactively lowered operating rates and tightened production schedules to digest previously accumulated inventories. While demand in the power and new energy sectors remains resilient, the incremental gains cannot offset the decline in conventional end-use demand. The demand side is unlikely to see a substantive recovery in the short term. SMM expects the industry's operating rate to continue its pullback trend in June.

According to SMM, in May, constrained by multiple factors such as the Labour Day holiday disruption, weak demand from home appliances, and copper prices fluctuating at highs, the operating rate of the enamelled wire industry pulled back 3 percentage points MoM. Currently, structural divergence on the demand side continues. Rigid demand from the new energy and power sectors remains steady, providing bottom support for the industry. However, the home appliance sector remains persistently weak, traditional end-user segments lack incremental rigid demand, and downstream end-users are highly sensitive to copper prices. Copper price fluctuations suppress purchase willingness, further dragging on order growth.