SHANGHAI, Feb. 26 (SMM) - China exported 121,921 mt of aluminum stranded wire, cable, plaited bands and related products (including non-insulated steel-core aluminum stranded wire) in 2012, up 5.4%, achieving a fourth straight year of export growth and exceeding the 106,138 mt recorded in 2008 when global financial crisis hit.
Power grid construction remains the single largest driver of aluminum wire and cable consumption in China. As more producers have begun producing aluminum cable and wire, competition among domestic producers has become increasingly fierce. Low R&D capabilities have left most producers mired in heavily contested low-end product classes with few able to produce higher tech products such as aluminum alloy conductors. This, in turn, has forced Chinese producers to aggressively pursue international markets.
Exports of aluminum wire and cable in these classes have not proved as lucrative as most hoped. One large aluminum wire and cable exporter in Fujian reported that export volumes rose last year, but margins fell as overseas buyers demanded higher quality. The rising price of aluminum in China has also cut into exporters’ margins.
Nevertheless, the general perception is that there is still room for Chinese aluminum wire and cable exports to grow. This is because improved quality from investments in aluminum wire and cable R&D should help restore the competitiveness of Chinese producers in the international market. Intensifying domestic competition will simultaneously drive more Chinese producers to export.