SHANGHAI, Apr. 2 (SMM) – Average operating rate at Chinese copper wire and cable producers rose by 26.91% on the month in March, to 79.09%, up from the 78.94% average a year ago, SMM’s survey of 20 enterprises showed.
Work at copper consuming projects resumed in March as the weather improved, while wire and cable producers that won recent bids also began delivering orders.
Consumption of wires for decoration and power projects both picked up, but since tight liquidity was affecting national construction projects and real estate projects, some deliveries were postponed.
Falling margins for industrial enterprises and increased government control over expansion in energy-consuming sectors were expected to dampen demand for enameled wires. In this context, most copper wire and cable producers expected no explosive growth in consumption during the second quarter of this year, and SMM believed average operating rate at copper wire and cable makers may increase to 83.34% in April.
Ratio of raw material stocks to finished goods at the surveyed producers fell to 24.87% in March. Copper wire and cable producers opted to deplete existing stocks to avoid financial losses given sharp declines in copper prices during March. Some wire and cable producers reported difficulties in collecting payments, which also limited their ability to build additional raw material stocks.