Greater investment in power grid holds operating rates at wire, cable producers stable

SHANGHAI, Dec 5 (SMM) – Operating rates across Chinese manufacturers of wire and cable averaged 86.2% in November, unchanged from a month ago but fell 0.77 percentage point from a year ago, SMM research found.

Sluggish consumption across home appliances, property and automobiles reduced orders across magnet wire producers but rates held stable in November as greater investment in power grid projects supported demand.

Data from the China Electricity Council showed that China’s investment in power grid projects in January-October dropped 7.6% compared to year earlier. The year-on-year decline was 2 percentage points smaller than the drop in January-September.

Most producers SMM surveyed are in medium or large companies whose products enjoy substantial market recognition. This also kept average rates stable.

SMM research showed that the raw material inventory to output ratio across wire and cable producers came in at 21.92% in November, down 2.45 percentage points from October as plants tended to deplete existing stocks of raw materials as the year drew to a close. Cash flow issues also kept them cautious in purchasing raw materials.

The average operating rate across Chinese manufacturers of wire and cable is expected to fall 2.73 percentage points month on month to 83.47% in December as poor weather conditions reduce demand.