This week (July 3–July 9), the SMM operating rate of copper wire and cable enterprises was recorded at 70.85%, down 0.95 percentage points WoW and down 0.67 percentage points YoY. Copper prices consolidated at highs during the week, with elevated raw material costs suppressing downstream purchasing sentiment, leaving overall industry orders sluggish. The sector is currently in the traditional consumption off-season, with end-use demand weak across all categories and the pace of power grid project order releases slowing in tandem. Only orders tied to emerging sectors outside China, such as AI computing and new energy, showed resilience. In terms of inventory, persistently high copper prices led wire and cable enterprises to adopt a more conservative approach to stockpiling, focusing mainly on small-volume purchases to meet rigid demand; raw material inventories fell 2.19% MoM. The combination of off-season demand weakness and elevated copper prices slowed downstream cargo pick-up, pushing finished product inventories up 1.18% MoM. Looking ahead to next week, the dual pressure of the traditional off-season and high copper prices is expected to continue weighing on end-user ordering willingness. SMM forecasts that the copper wire and cable operating rate for the upcoming week (July 10–July 16) will decline by another 1.36 percentage points MoM to 69.49%, and fall 3.41 percentage points YoY.

[SMM Tin Midday Review: Tightening expectations outside China are weakening, the most-traded SHFE tin contract consolidates near 416,000]

In H1 2026, the operating rate of China's wire and cable industry generally showed a trend of "rapid post-holiday recovery, peaking during peak season then gradually pulling back." At the beginning of the year, under pressure from Chinese New Year and high copper prices, the industry's operating rate hit bottom at 27.72%. It then rapidly recovered, driven by concentrated grid delivery and phased copper price pullback. Later, after copper prices rebounded and influenced by the traditional off-season, the operating level gradually pulled back. I. H1 Market Review and Summary: Copper Price Fluctuations Dominate, Power Grid Shines Wild swings in copper prices were the core variable influencing the industry's operating pace in H1. In Q1, the start of the "15th Five-Year Plan" power grid investment formed a demand base. The phased decline in copper prices further stimulated end-users to concentrate on restocking at lows. After copper prices rebounded in Q2, downstream purchase willingness was suppressed. However, structural volume growth in demand from emerging fields such as new energy and AI provided some support at the bottom for the operating rate. From the perspective of various demand ports, the proportion of cables used in traditional power grid infrastructure has declined, while the proportion for new energy supporting applications has risen significantly. Offshore wind power, energy storage, NEVs, and data centers have become the core new growth drivers. However, the power grid remains the core pillar of demand. In Q1, State Grid Corporation of China completed fixed asset investment of over 129 billion yuan, up 37% YoY, directly driving a concentrated release of wire and cable demand. Notably, the demand for cables supporting AI data centers has entered an explosive period. SMM forecasts that the growth rate of copper demand for AI data centers will reach 54.94% for the full year. Demand for high-speed copper cables and power supporting cables is growing steadily, and the operating rates and production schedules of relevant domestic enterprises are staying high. In contrast, in traditional sectors, data on new starts and completions in real estate remained sluggish. Demand for home decoration and civilian building cables also weakened, overall offsetting the growth dividend of emerging tracks. Cost side, industry profitability was notably under pressure. On one hand, the overseas geopolitical conflict in March pushed up prices of cable auxiliary materials. Coupled with high industrial energy costs, enterprises' comprehensive production costs were passively pushed up. On the other hand, during the rapid surge in copper prices in May, enterprises' raw material procurement costs had already risen sharply, but some order settlements were still based on earlier lower monthly average prices, leading to further profit margin compression. Coupled with fierce competition in the ordinary cable track, enterprises basically have no room for price adjustment or premium, ultimately resulting in compressed profits for small and medium-sized wire and cable enterprises in H1, and industry profits concentrated upstream in raw materials. II. Exports Remain Highly Prosperous, Imports Only Serve as High-End Supplement In terms of imports and exports, exports continued to be highly prosperous. From January to May, cumulative exports of wire and cable reached 1.2692 million mt, up 8.12% YoY. Among them, exports of copper wire and cable were 633,700 mt, up 15.6% YoY, with Australia, the Philippines, and Thailand being the top three destinations. The core driving force behind the export boom is the rigid import demand formed by infrastructure expansion and energy transition in Southeast Asia, the Middle East, and Africa. Grid renovation and AI computing power supporting construction in Europe and the US continue to release growth, boosting the willingness of domestic enterprises to go global. Imports are relatively small in scale. From January to May, cumulative imports of wire and cable were 53,400 mt, mainly serving as a supplement for high-end products. III. H2 Market Outlook: Demand Structure Diverges, Emerging Tracks Maintain High Growth Looking ahead to H2, copper price fluctuations remain the core variable throughout the second half. If copper prices continue to fluctuate at highs, they will continue to suppress end-user stockpiling willingness, limiting the room for demand recovery during the peak season. During the traditional consumption off-season, conventional terminal orders from real estate and civilian sectors are weak. The industry operating rate will consolidate at lows, and end-users will maintain a cautious strategy of locking copper based on orders and making just-in-time procurement. It will be relatively difficult for orders to recover. Entering the H2 consumption peak season, the first-year conclusion of the "15th Five-Year Plan" will drive a concentrated sprint in power grid projects. Ultra-high voltage and distribution network tenders are accelerating, and Q4 delivery expectations are sufficient, becoming the core support for H2 demand. The high prosperity of emerging tracks continues. The demand for copper cables supporting AI data centers continues to grow in volume. The growth rates of offshore wind power and energy storage cables are highly certain. The steadily increasing penetration rate of NEVs drives the growth of wiring harness and charging pile cable demand. The traditional construction and real estate sector is unlikely to improve and will continue to drag down overall demand performance. On the export front, the export momentum from H1 is expected to continue into H2. Rigid demand from grid renovation and upgrades in Europe and the US, as well as AI computing power supporting construction, continues to be released. In Southeast Asia, the Middle East, and Africa, infrastructure expansion and energy transition are advancing at a high speed, and import dependence on China's cables remains high. Coupled with the continuous deepening of domestic enterprises' go-global layout and increasingly mature overseas channels, export prosperity will remain at a high level in H2, and full-year cable exports are expected to hit a new high.

[2026 Copper Plate/Sheet and Strip Semiannual Review and Outlook: H1 Operating Rate Hits a Five-Year High for the Same Period, Emerging Sectors Underpin Industry Resilience] In H1 2026, after experiencing wild swings in copper prices at the start of the year and the seasonal shutdown during the Chinese New Year, China's copper plate/sheet and strip industry entered a rapid recovery path from March onward, presenting an overall...

According to SMM, the comprehensive operating rate of the copper plate/sheet and strip industry in June 2026 stood at 74.97%, down 1.58 percentage points MoM but up 8.19 percentage points YoY. The actual operating performance for the month was 0.46 percentage point higher than earlier market expectations. Among them, the operating rate of large enterprises was 84.38%, that of medium-sized enterprises was 55.99%, and that of small enterprises was 70.72%.

[Copper Plate/Sheet and Strip: Emerging Track Supports Industry Resilience, June Stronger-than-Usual Off-Season Operating Rate Far Exceeding Same Period] According to SMM, in June 2026, the operating rate of the copper plate/sheet and strip industry was ......

H1 2026 was the critical build-up phase — dense conferences, national standards, tech breakthroughs, capital inflows, and capacity rollouts. H2 will shift into "race mode": multiple solid-state/semi-solid vehicles launch, and the competitive landscape for 2027 volume production will be largely locked in by year-end.

Futures: The overnight LME lead 3M contract opened at $1,870/mt, then drifted lower in the initial session, dipping to $1,853/mt during the day before bearish pressure eased and futures rebounded. In the latter part of the evening session, the rally accelerated, with prices gradually climbing to a high of $1,881.5/mt. Towards the close, futures pulled back under modest pressure to settle at $1,866.5/mt, forming a long lower shadow candlestick and losing $5.5/mt, a decline of 0.29%. The overnight SHFE lead 2608 contract opened at 15,895 yuan/mt. After a brief early spike to 15,930 yuan/mt, bulls lost momentum as bears entered to push prices lower, with the contract dropping to a low of 15,795 yuan/mt. Gaining some support from light buying at the lows, prices rebounded slightly and are now trading near 15,810 yuan/mt, down 65 yuan/mt, a decline of 0.41%. Trading volume expanded and open interest edged up by 1,263 lots, with the contract retreating after a rapid rise and showing overall weakness. On the macro front: Fed Chairman Warsh: Inflation expectations and inflation risks have both diminished in recent weeks. The US ADP employment change for June increased by less than expected. Warsh reportedly appointed a Bessent aide as a Fed advisor. Meta is reportedly considering selling surplus AI computing power. Wang Yi held a telephone call with US Secretary of State Rubio. An agent confirmed that MLCC giant Yageo raised prices. Spot Fundamentals: SHFE lead has recently suffered successive breakdowns, and losses widened again today, with suppliers holding prices firm on their cargoes—lead ingot cargoes in the Jiangsu, Zhejiang, and Shanghai regions were quoted at premiums. Meanwhile, the discount on EXW primary lead smelter cargoes narrowed. In major producing regions, quotations were near parity with the SMM #1 lead average price. For secondary lead, smelter losses deepened as lead prices fell, and some enterprises signaled potential production cuts or suspensions. Market quotes were scarce, with a few secondary refined lead offers at premiums of 0–75 yuan/mt against the SMM #1 lead average price. As the semi-annual liquidity squeeze eased in July, large downstream enterprises resumed normal procurement and showed marginally higher inquiry interest. However, given the sharp decline in lead prices, most downstream enterprises remained cautious, leaving market trading volumes subdued. Inventories: As of July 1, LME lead inventory decreased by 1,900 mt to 301,775 mt. As of June 29, SMM data showed total social inventory of lead ingots across five major domestic regions climbed to 71,200 mt, reaching a stage high since June, with visible inventory buildup pressure remaining pronounced. Lead Price Outlook Today: LME lead inventory remains elevated, while Goldman Sachs continues to add short positions, and inflows of low-grade lead imports are weighing on SHFE lead. Supply side, lead concentrate availability is tight, with July TCs extending their decline; primary lead smelters resuming production after maintenance are expected to add 20,000 mt of output in July. Secondary lead raw material supply is tight, scrap battery prices fall, and production resumption plans are highly dependent on lead prices. In July, batteries enter the consumption off-season, with downstream only making small tentative purchases at low prices, and there is no concentrated restocking. Lead prices are in the doldrums in the short term, and a stop in their decline will require downstream concentrated purchasing and the implementation of secondary lead production cuts.

[SMM Morning Meeting Summary: ADP Data Below Expectations, LME Zinc Maintains Fluctuating Trend] Overnight, LME zinc opened at $3,542/mt. In early trading, the price briefly touched a high of $3,551.5/mt; subsequently, the futures came under pressure and pulled back, dipping to $3,476/mt during the session. Entering the night session, LME zinc rose above the daily average line; however, lacking upward momentum, it then drifted lower, slowly moving lower towards the close, finally closing down at $3,492/mt, down $59.5/mt, a decline of 1.68%. Trading volume decreased to 97,682 lots, while open interest increased by 3,263 lots to 266,000 lots.

[Latest data from the General Administration of Customs] In May 2026, China's wire and cable exports were 282,000 mt, up 6.33% MoM and 9.2% YoY; cumulative exports for January-May 2026 were 1.2692 million mt, up 8.12% YoY. Among this, copper wire and cable exports were 141,300 mt, up 8.27% MoM and 14.26% YoY; cumulative exports for January-May were 633,700 mt, up 15.6% YoY ......