The market demand for aluminum rods is light and the weekly operating rate of aluminum wires has declined [SMM analysis]

This week, the operating rate of leading aluminum cable companies was 62.4%, down 2 percentage points from last week. Due to the acceleration of the country's ultra-high voltage construction, the shipments of most leading companies have remained normal. However, some companies have gradually slowed down their production and shipments due to the approaching holidays, resulting in a decline in the operating rate of aluminum cables during the week. In terms of stocking up, we learned through research that some leading companies, due to their proximity to aluminum pole manufacturers, had suppliers continue to supply during the Spring Festival holiday to meet production needs in February. At the same time, the company said that in February, it was mainly for the production of finished product inventories, and it is expected to start intensive delivery of orders in March, and the delivery pressure is still high. On the supply, due to the shutdown of downstream cable manufacturers for holidays, the aluminum rod supply and demand market has seen low transaction volume and poor demand. Entering early February, approaching the Spring Festival, most remaining companies will also enter the holiday period. It is expected that the industry will enter the off-season in February, and the overall aluminum cable operating rate may drop significantly.

Due to poor demand during the week, aluminum rod processing fees were adjusted downward overall. The average ex-factory price of 1A60 ordinary aluminum rod processing fees in Shandong on Friday was recorded at 350 yuan/mt, which was adjusted downward by 50 yuan/mt compared with last week; 1A60 in Henan The average ex-factory price of aluminum rod processing fees was reported at 400 yuan/mt, down 50 yuan/mt from last week; the average ex-factory price of 1A60 aluminum rod processing fees in Inner Mongolia was reported at 150 yuan/mt, mainly stable; the average arrival price of aluminum rod processing fees in south China was recorded at 450 yuan/mt, and the actual transaction was lower. At the end of the year, the downstream industry has entered a period of shutdown and holiday, and demand has weakened, but aluminum prices still fluctuate around 19,000 yuan. Manufacturers are worried that aluminum prices will fall after the year, and the stocking mood is not good, resulting in very few transactions in the aluminum pole market this week. Based on the trends in previous years, SMM predicts that aluminum rod processing fees will remain weak next week, and the market phenomenon of poor demand may continue after the Spring Festival. It is necessary to focus on the recovery of logistics after the holiday and the shipment of orders.