SHANGHAI, Nov. 1 (SMM) -- A recent SMM survey of 20 major domestic electric wire and cable producers (total capacity: 872 kt) revealed the following insights:
1) Operating Rates Fall MoM
According to the SMM survey, the average operating rate at the 20 electric wire and cable producers was 78.9% in October, down from 84.7% in September. Declines in operating rates were due mainly to the following reasons. First, China’s National Day holiday fell in earlier October, with production reduced during the holiday period. Second, operating rates at some producers in Jiangsu province were unable to reach normal operating levels due to local government power restrictions. Third, high copper prices depressed terminal demand for electric wire and cable. Producers in the survey told SMM that recent orders have improved, but there is not much chance orders will continue to grow due to increasingly colder weather.
2) Raw Material Inventories Drop in October
The survey also shows that raw material inventories were 17.4% of the production in October, down on a monthly basis. Cautious purchasing by electric wire and cable producers due to higher prices was the main reason behind declines in raw material inventories in October. However, condition should improve as downstream producers are gradually accepting the higher prices.
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