Operating Rates at Aluminum Wire and Cable Producers Down 29.5% MoM in January

SMM Insight 03:49:55PM Feb 14, 2012 Source:SMM

SHANGHAI, Feb. 14 (SMM) -- According to a recent SMM survey, the average operating rate at 24 domestic aluminum wire and cable producers representing 1.18 million mt/yr in total capacity was 40.3% during January, down 29.5% from 69.8% in December.

SMM sources report that significant declines in operating rates at aluminum wire and cable producers were due mainly to the Chinese New Year holiday. The construction of many wire and cable projects had been suspended successively in early January as migrant workers returned home for the holiday and due to cold weather, so demand for wire and cable weakened, with short-term orders from power companies falling significantly as well. Therefore, some wire and cable producers had begun to reduce production before the holiday, taking this opportunity to conduct unit maintenance.

Since State Grid Corporation and provincial grid companies will make bids in late February, medium and large wire and cable producers began to restart production in preparation for participation in the bid following the Chinese New Year holiday. The cold weather in North China is unfavorable for the construction of power projects, so demand for wire and cable products remains weak. Some power companies mainly consume pre-holiday inventories for project construction, so operating rates at most aluminum wire and cable producers have not improved significantly.

SMM expects operating rates at aluminum wire and cable producers to rise slightly in February.   

 

Operating Rates at Aluminum Wire and Cable Producers Down 29.5% MoM in January

SMM Insight 03:49:55PM Feb 14, 2012 Source:SMM

SHANGHAI, Feb. 14 (SMM) -- According to a recent SMM survey, the average operating rate at 24 domestic aluminum wire and cable producers representing 1.18 million mt/yr in total capacity was 40.3% during January, down 29.5% from 69.8% in December.

SMM sources report that significant declines in operating rates at aluminum wire and cable producers were due mainly to the Chinese New Year holiday. The construction of many wire and cable projects had been suspended successively in early January as migrant workers returned home for the holiday and due to cold weather, so demand for wire and cable weakened, with short-term orders from power companies falling significantly as well. Therefore, some wire and cable producers had begun to reduce production before the holiday, taking this opportunity to conduct unit maintenance.

Since State Grid Corporation and provincial grid companies will make bids in late February, medium and large wire and cable producers began to restart production in preparation for participation in the bid following the Chinese New Year holiday. The cold weather in North China is unfavorable for the construction of power projects, so demand for wire and cable products remains weak. Some power companies mainly consume pre-holiday inventories for project construction, so operating rates at most aluminum wire and cable producers have not improved significantly.

SMM expects operating rates at aluminum wire and cable producers to rise slightly in February.