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Slower Demand from Power Sector Cuts Operating Rate at China’s Copper Wire & Cable Makers in July

iconAug 5, 2014 14:32
Source:SMM
The average operating rate at China’s copper wire and cable producers fell 1.85 percentage points on the month and 2.71 percentage points year-on-year to 79.85% in July, the latest SMM survey shows.

SHANGHAI, Aug. 5 (SMM) – The average operating rate at China’s copper wire and cable producers fell 1.85 percentage points on the month and 2.71 percentage points year-on-year to 79.85% in July, the latest SMM survey shows.

With upgrades to China’s power grid delivering results, electricity consumption has grown more slowly this year – 5.3% through H1. The China Electricity Council has revised its forecast for electricity consumption growth this year from 7.0% to 6.0%. Moreover, investment in the power grid declined 0.6% in H1, sharply off the 13% growth expected. Investment in power generation has also fallen 12.67%. This slowing in consumption and investment is impeding any rise in demand for power cable.

Producers that have won bids with the State Grid have indicated that the orders are not for immediate delivery and that they are not able to begin production either inasmuch as the State Grid has yet to announce specific requirements.

Demand for power cable from the China Southern Power Grid has slowed with few new orders expected for August. Producers of enameled wire have reported a 10-20% decline in orders in July and expect poor sales through Q3, a slow demand season for home appliance compressors and transformers. Thus, SMM projects the average operating rate at these producers to edge lower to 78.85% in August.

SMM surveyed 21 copper wire and cable manufacturers, covering 1.078 million tpy in total capacity.
 

copper wire and cable
operating rate survey
China copper wire and cable operating rate

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