Growing Power Grid Construction During January-April Boosts Aluminum Consumption

SHANGHAI, Jun. 6 (SMM) – Data from National Energy Administration and National Bureau of Statistics show that investment in power grid infrastructure construction during the first four months of this year totaled RMB 86.6 billion, up 29.6% YoY. 8,449 km of transmission lines (＞200 KV) were added during the same period, a 109.5% surge YoY.

SMM’s survey found that operating rates at aluminum wire and cable producers rose to above 60% during January-April, approaching levels seen in the same period last year. This is driven by a noticeable increase in orders at aluminum wire and cable producers following completion of two batches of bid invitation by State Grid Corporation of China (SGCC) and provincial grid power companies and due to the ongoing third batch of bid invitation.  

Aluminum conductor steel reinforced and aluminum conductor aluminum clad steel reinforced, both high-voltage transmission lines, are major drivers of primary aluminum consumption. The prominent growth in newly-added transmission lines suggests that accelerating power grid construction in China is boosting aluminum wire and cable consumption, thereby driving demand for primary aluminum.