SHANGHAI, Feb. 27 (SMM) –A recent SMM survey of 20 major domestic electric wire and cable producers (total capacity: 1.093 million mt/yr) revealed the following insights:
1) Electric Wire and Cable Consumption Fails to Improve in February
The average operating rate as of February 24th at the surveyed electric wire and cable producers was 71.37%, still considered low. The average operating rate, however, rose by 19.27% over the same period of 2011 when the Chinese New Year holiday had depressed operating rates. Most electric wire and cable producers told SMM post-holiday orders were only growing slowly outside the traditional high demand period. In addition, construction projects in North China have not started due to cold weather, further negatively affecting wire and cable demand. The producers also said downstream enterprises are not eager to place orders as current prices remain relatively high.
As the weather improves during March, demand for electric wire and cable will begin to grow as electric wire and cable bidding projects commence, so operating rates at electric wire and cable producers will probably rise during March.
2) Raw Material Inventories at Electric Wire and Cable Producers Remain Normal
Raw material inventories at electric wire and cable producers contacted by SMM were 23.78% of production as of February 24th, considered normal. Most of the producers were purchasing on order and had no intention of increasing raw materials purchases. Cash flows at the producers also did not allow high raw material inventories.