Copper wirerod accounts for ～75% of refined copper consumption and ～13% of direct scrap consumption. - Global wirerod production remained effectively flat y/y in the second quarter, experiencing negative growth of -0.2% and reaching 4.58Mt. - Chinese output grew by 0.8% y/y. In the rest of the world overall growth was negative, with Western Europe particularly weak. We estimate that Chinese wirerod production growth increased by 0.8% y/y in the second quarter of 2019 with wirerod consumption also posting modest growth of 0.4% y/y. There has been a marked slowdown in the Chinese automotive sector in 2019, with Chinese light vehicle output down by 16% y/y in the second quarter of 2019; according to LMC. This has been a key driver of weak demand for copper winding wire and low voltage energy cable. In contrast, the new energy vehicle sector remained strong with CAAM (China Association of Automobile Manufacturers) data showing growth in production and sales of 32.2% y/y and 31.8% y/y respectively. However, it should be noted that these growth rates are below expectations and new energy vehicles still account for just 5% of new light vehicle builds in China.
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