Infrastructure, 5G demand lifts operating rates across wire, cable producers in Jul

SHANGHAI, Aug 6 (SMM) – Chinese manufacturers of wires and cables hiked their operating rates more than expected in July as demand improved from infrastructure and 5G base station projects. 

The latest SMM survey showed that the average run-rate across Chinese wire and cable producers rose 1.78 percentage points from June to stand at 91.48% in July, up 7.13 percentage points from a year ago.

Greater investment in infrastructure, for the renovation of old living quarters and construction of metro and railroads, bolstered operation across wires, cables producers in July. 

The first half of this year saw domestic investment in grid project amounting to 164.4 billion yuan, with investment in June rebounding considerably. This, together with the conversions of coal power plants to green energy in north-west China also fueled demand for wire and cables, and encouraged operation at producers. 

The ratio of raw materials inventories to monthly output at Chinese wire and cable producers stood at 27.33% in July, up 2.4 percentage points from June, as greater orders and lower Shanghai copper prices drove producers to stockpile. 

For August, the average operating rate across Chinese wire and cable producers is expected to inch down 0.38 percentage point month on month to 91.1%, as a slow season set in. On a yearly basis, however, the rate is expected to grow 2.66 percentage points in August. 

SMM remains optimistic about downstream consumption from infrastructure and 5G sectors in the fourth quarter.