SHANGHAI, Dec. 6 (SMM) –
A recent SMM survey of 21 major domestic electric wire and cable producers (total capacity: 872 kt/yr) revealed the following insights:
1) Operating Rates Edge Up
According to the SMM survey, the average operating rate at the 21 major electric wire and cable producers in China was 79.1% in November, up 0.2% from October’s 78.9%. The stable operating rates now experienced in the industry are due to the number of long-term contracts at most large electric wire and cable manufacturers, whose flexibility allows them to adjust output as orders change. Recently, orders received at those producers surveyed have dropped along with downstream producers’ need to collect the capital at the year’s end, and depressed demand in North China in the colder weather. The condition will likely affect operating rates in the future.
2) Raw Material Inventories Increase Slightly
The SMM survey shows raw material inventories were 30.7% of production in November, up slightly 0.2% from 30.5% in October. Producers in the survey told SMM that they would not make large purchases due to volatile copper prices, despite recent price declines, but if copper prices continue to fall, they may begin to build up inventories. In other news, purchase volumes of scrap copper fell since it had no significant price advantage and due to tight scrap copper supply.
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