SHANGHAI, July 5 (SMM) - A recent SMM survey of 19 major domestic wire and cable producers (total capacity: 822 kt/yr) revealed the following insights:
1) Operating Rates Continue to Improve
Based on the survey, the average operating rate at the 19 wire and cable producers was 86.3% in June, up from 83.3% in May. The reason behind higher operating rates was strong demand. Producers in the survey told SMM that operating rates were higher at construction projects following improved weather conditions. June orders at the 19 wire and cable producers improved from May levels as projects having been started in north China, and as the number of grid projects under bidding increased. Enameled wire producers have also maintained strong demand.
2) Raw Material Inventories Fall
The SMM survey also shows that the proportion of raw material inventories to production fell to 20.0% in June, down from 24.7% in May. SMM believes lower raw material inventories were attributed to stronger-than-expected orders received by wire and cable producers. Producers in the survey told SMM that they will purchase goods more frequently in response to recent copper price declines and strong orders. In this context, raw material inventories will likely increase.
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