Exports Up, but Profits Down at Chinese Aluminum Wire and Cable Producers in 2012-Shanghai Metals Market

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Exports Up, but Profits Down at Chinese Aluminum Wire and Cable Producers in 2012

SMM Insight 01:33:18PM Jan 10, 2013 Source:SMM

SHANGHAI, Jan. 10 (SMM) – According to China Customs, China exported 7,864 mt of aluminum stranded wire, cables, plaited bands and similar (HS Code 7614) in November. YTD exports through November hit 110,190 mt, up 6.7% YoY. Domestic producers reported falling profits despite rising exports in 2012.

SMM data shows China’s exports of non-insulated steel-core aluminum stranded wire, cables, plaited bands and the like (HS Code 76141000) reached 67,179 mt during January-November 2012, down 18.7% YoY. Exports of other non-insulated aluminum stranded wire, cables, plaited bands and the like (HS Code 76149000) were 43,011 mt, up 108% YoY.

Guangdong-based exporters of aluminum wire and cables such as steel-core aluminum stranded wire told SMM that exports rose slightly in 2012 compared with 2011, but profits were down on a yearly basis. This is largely because the rise in the number of aluminum wire and cable exporters in 2012 caused price competition to intensify. Besides, the appreciation of RMB also squeezed margins at exporters.

Aluminum wire and cable producers believe exports will still grow in 2013 since export trade can guarantee cash flows in a short period of time. In contrast, payment period is longer when supplying State Grid Corporation of China and China Southern Power Grid. Therefore, when prices are the same, producers prefer to export so as to generate working capital in a short period of time. 
 

Exports Up, but Profits Down at Chinese Aluminum Wire and Cable Producers in 2012

SMM Insight 01:33:18PM Jan 10, 2013 Source:SMM

SHANGHAI, Jan. 10 (SMM) – According to China Customs, China exported 7,864 mt of aluminum stranded wire, cables, plaited bands and similar (HS Code 7614) in November. YTD exports through November hit 110,190 mt, up 6.7% YoY. Domestic producers reported falling profits despite rising exports in 2012.

SMM data shows China’s exports of non-insulated steel-core aluminum stranded wire, cables, plaited bands and the like (HS Code 76141000) reached 67,179 mt during January-November 2012, down 18.7% YoY. Exports of other non-insulated aluminum stranded wire, cables, plaited bands and the like (HS Code 76149000) were 43,011 mt, up 108% YoY.

Guangdong-based exporters of aluminum wire and cables such as steel-core aluminum stranded wire told SMM that exports rose slightly in 2012 compared with 2011, but profits were down on a yearly basis. This is largely because the rise in the number of aluminum wire and cable exporters in 2012 caused price competition to intensify. Besides, the appreciation of RMB also squeezed margins at exporters.

Aluminum wire and cable producers believe exports will still grow in 2013 since export trade can guarantee cash flows in a short period of time. In contrast, payment period is longer when supplying State Grid Corporation of China and China Southern Power Grid. Therefore, when prices are the same, producers prefer to export so as to generate working capital in a short period of time.