SHANGHAI, Jan. 10 (SMM) –
The recent SMM survey of 21 major domestic electric wire and cable producers (total capacity:  863 kt/yr) revealed the following insights:
 
1) Operating Rates Drop Significantly
According to the survey, the average operating rate in early January at the surveyed domestic electric wire and cable producers was 64.0%, down by 15.1% from November’s 79.1%, but still up from 59.2% seen a year earlier.  Seasonal factors are believed to be major factors behind declines in operating rates.  January is the traditional low demand period, so the lower rate was expected, while continuous copper price gains helped depress downstream demand.  Producers in the survey told SMM that orders received were down sharply after spot copper prices rose above RMB 70,000/mt. 

2) Raw Material Inventories Up
The survey also revealed raw material inventories in early January were 39.3% of consumption, up from 30.7% in November, with two factors believed behind the increase.  First, tight cash flows at enterprises have eased, allowing downstream producers to build stocks for the Chinese New Year holiday.  Second, continuous copper price gains are making producers believe copper prices will continue to advance, forcing them to buy now.

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