Acceleration in Rural Power Grid Renovations to Have Limited Impact on Wire/Cable Consumption-Shanghai Metals Market

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Acceleration in Rural Power Grid Renovations to Have Limited Impact on Wire/Cable Consumption

SMM Insight 03:54:22PM Jan 28, 2013 Source:SMM

SHANGHAI, Jan. 28 (SMM) – On January 23, China's State Council released the 12th Five-Year Plan on Energy Development (hereinafter referred to as the Plan). The Plan pointed out that China's power consumption will reach 6.15 trillion kilowatt hours in 2015. In order to meet the target of “same power grids and same electricity prices for all kinds of electricity uses” for both urban and rural residents, China will commence a new round of renovation and upgrading of rural power grids in an all-round way.
 
Investments in rural power grids are expected to increase for this and next year, but market insiders believe that this can have an extremely limited positive impact on copper wire and cable consumption. Manager at a cable company said aluminum stranded wires will be generally applied in rural power grid renovations.  

The State Council formally decided to conduct renovation and upgrading of rural power grids in early 2011, and most renovation tasks have been completed owing to increased investments in developed areas and densely populated areas following many years' construction. Zhang Guobao, head of China's National Energy Administration, earlier expected investment scale in the three-year (2010-2012) rural power grid renovation and upgrading at no less than RMB 200 billion. Although the concrete amount of investments was not unveiled, actual investments should be significantly higher than estimated investments in rural power grids based on data released by the NBS.  

Power Grid Construction Investment 2010-2012
Year
Investment Amount Completed (RMB 100 Million)
YoY (%)
2010
3410
--
2011
3682
7.98
2012
3693
0.30
Sources: NBS, SMM

Some market insiders hold the view that rural power grid renovation may be finished in 2015 and the target of “same power grids and same electricity prices for all kinds of electricity uses” will come true at that time. This means that China will increase work efficiency and accelerate investments during 2013-2014, and complete rural power grid renovation in remote regions and areas without electricity.

Collectively, investments in major network (220KV-750KV) will slow in the next two years following large scale construction in the recent years, but will quicken in network (800KV UHVDC and 1000KV UHVAC) and network below 110KV.

 

Acceleration in Rural Power Grid Renovations to Have Limited Impact on Wire/Cable Consumption

SMM Insight 03:54:22PM Jan 28, 2013 Source:SMM

SHANGHAI, Jan. 28 (SMM) – On January 23, China's State Council released the 12th Five-Year Plan on Energy Development (hereinafter referred to as the Plan). The Plan pointed out that China's power consumption will reach 6.15 trillion kilowatt hours in 2015. In order to meet the target of “same power grids and same electricity prices for all kinds of electricity uses” for both urban and rural residents, China will commence a new round of renovation and upgrading of rural power grids in an all-round way.
 
Investments in rural power grids are expected to increase for this and next year, but market insiders believe that this can have an extremely limited positive impact on copper wire and cable consumption. Manager at a cable company said aluminum stranded wires will be generally applied in rural power grid renovations.  

The State Council formally decided to conduct renovation and upgrading of rural power grids in early 2011, and most renovation tasks have been completed owing to increased investments in developed areas and densely populated areas following many years' construction. Zhang Guobao, head of China's National Energy Administration, earlier expected investment scale in the three-year (2010-2012) rural power grid renovation and upgrading at no less than RMB 200 billion. Although the concrete amount of investments was not unveiled, actual investments should be significantly higher than estimated investments in rural power grids based on data released by the NBS.  

Power Grid Construction Investment 2010-2012
Year
Investment Amount Completed (RMB 100 Million)
YoY (%)
2010
3410
--
2011
3682
7.98
2012
3693
0.30
Sources: NBS, SMM

Some market insiders hold the view that rural power grid renovation may be finished in 2015 and the target of “same power grids and same electricity prices for all kinds of electricity uses” will come true at that time. This means that China will increase work efficiency and accelerate investments during 2013-2014, and complete rural power grid renovation in remote regions and areas without electricity.

Collectively, investments in major network (220KV-750KV) will slow in the next two years following large scale construction in the recent years, but will quicken in network (800KV UHVDC and 1000KV UHVAC) and network below 110KV.