The delivery of State Grid’s orders will increase by 38.5% month-on-month. Can the aluminum wire and cable industry return to the peak season? [SMM analysis]

The average operating rate of major aluminum wire and cable companies remained stable at 60% in the week. As of mid-to-late March, the operation of leading aluminum wire and cable companies was relatively stable. Companies in Jiangsu and Zhejiang were in a state of tight delivery, while companies in other regions said that their operating rates needed to be supported by new orders. According to the statistics of State Grid's orders, the pick-up volume of aluminum wire and cables in March was 125,000 tons, while the pick-up volume in April is expected to be 173,000 tons, a month-on-month increase of 38.5%. Although the performance of new orders by downstream companies is less than expected, under the pressure of delivery of State Grid orders, the industry's pickup volume is increasing, giving companies certain support to start operations. Boosted by terminal delivery, it is expected that the operating rate of aluminum wire and cable sector will improve.

In terms of aluminum rods, processing fees have changed frequently recently. The average ex-factory price of 1A60 aluminum rod processing fees in Shandong on Friday was 450 yuan/ton; the average ex-factory price of 1A60 aluminum rod processing fees in Henan was reported at 400 yuan/ton. The average ex-factory price of 1A60 aluminum rod processing fee in Inner Mongolia was 200 yuan/ton; the average arrival price of 1A60 aluminum rod processing fee in south China was 450 yuan/ton. As the supply in the aluminum rod market has been relatively loose recently and demand has not yet returned to peak season levels, actual transactions on the market are low. Coupled with the recent strong performance of aluminum prices, the enthusiasm of downstream companies to start production has been greatly frustrated, and their willingness to purchase goods is not good. In order to withdraw funds, aluminum rod companies sold goods at low prices on the market. As companies recently expressed concerns about aluminum rod inventories, and demand from downstream companies is still in the recovery stage, it is expected that processing fees will remain stable until aluminum rod inventories fall to the company's safe range.