Brisk orders lift Aug operating rates across wire, cable plants

SHANGHAI, Sep 10 (SMM) – Chinese manufacturers of wire and cable operated at a higher level in August as they received brisk orders, SMM research found.

The operating rate averaged 88.44% last month, up 4.09 percentage points month on month but down 3.74 percentage points year on year.

Declines in copper prices bolstered consumption. Demand from State Grid Corporation of China and China Southern Power Grid Company also grew.

Some sources told SMM that the two utility giants are mulling an extension of the payment period, from the current two months to five months. Given frequent cash flow issues, wire and cable producers are likely accept orders selectively.

SMM also found that orders were more likely to flow to medium-sized and large producers as downstream consumers favoured their high-quality products. This led to the shutdown of some small wire and cable producers.

The average operating rate is expected to inch up 1.56 percentage points to 90% in September, standing 1.54 percentage points lower than the same period last year.