Holiday, weaker demand sharply lower Feb operating rates across wire, cable producers

SHANGHAI, Mar 4 (SMM) – Poor orders and CNY closures sharply lowered operation across producers of wires and cables in China for February.

The average operating rate across wire and cable plants fell 21.67 percentage points from January to stand at 47.18% in February, up 7.88 percentage points from a year earlier, showed an SMM survey.

During the CNY holidays, most plants did not return to normaloperation until February 19.

Operation at construction sites slowed as the weather grew colder. Demand for electronic wires and telecommunication cables also shrank. Most buyers required post-holiday delivery for orders for wires and cables. Tepid orders acocunted for slower operation across wire and cable plants in February.

The SMM survey also showed the industrial concentration across the wire and cable producers after a subway issue in Xi'an in 2017. Large plants in February received more orders in February 2018, and raised production. Orders to small and medium-sized plants remained poor.

SMM also found that the ratio of raw materials inventory to output across wire and cable producers came in at 38.89% in February, up 11.56 percentage points from January. Despite lower stocks of raw materials at wire and cable producers, a relatively sharper decline in production grew the ratio.

Operating rates across wire and cable producers are expected to rebound by 40.35 percentage points to stand at 87.53% in March as end-market consumption picks up. Many producers told SMM that they received brisk orders from the solar, power grid and offshore wind power sectors. Demand from magneic wires and telecommunication cables, however, remained sluggish.