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Operating Rates at Smaller Electric Wire and Cable Producers Down Sharply by 14.1% Due to Cash Pressures

iconJun 21, 2011 13:51
Source:SMM

SHANGHAI, Jun. 21 (SMM)—According to a recent SMM survey of 22 major domestic eclectic wire and cable producers, the average operating rate at the surveyed electric wire and cable producers was 87.3% in June, up 2.2% from May. However, operating rates at smaller producers fell sharply by 14.1%.

Based on the data, orders tended to shift to medium and large producers, with operating rates during June at larger producers increasing 2% from May’s 87.4%, while operating rates at medium-size producers rose to 86.0%, also up from 79.6% in May. Operating rates at smaller producers fell sharply by 14.1%. The shift of orders away from smaller producers reflects tight cash flows at smaller producers following continuous credit tightening measures by the People’s Bank of China since early 2011. For the electric wire and cable industry, over 70% of producer costs came from copper purchases, so higher copper price, coupled with tighter credit, is having a significant impact on smaller producers.    

 

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