Winding Wire Market Developments

The pattern of world trade so far during 2011 makes interesting reading. Winding wire volumes were strongly ahead of year-ago levels in Q1, at double digit rates, but this slowed to 3-5% during Q2. In July there was a big discontinuity and break of trend when an 18% year-on-year decline suddenly occurred.

The difference is mainly a feature of the fact that the seasonal peak trading month in 2010 was July and in 2011 it was June. This year-on-year decline slowed to 5% in August and 4% in September, when volumes have favourably begun their seasonal sequential uptrend. The volatility of copper prices (comprising such a large share of the winding wire final selling price) may well have contributed to a disruption in the normal pattern of ordering over the summer. Weakness in the winding wire business has been an early warning signal of economic recession. However, it is to be hoped that the strengthening automotive industry prospects will safeguard the current softness in winding wire demand as a whole. In this respect, the seasonal upturn in September volumes can be seen as very good news indeed