Greater orders grow operating rates across wire, cable producers in Apr

SHANGHAI, Apr 28 (SMM) – Production enthusiasm among wire and cable producers in China improved in April, fuelled by brisk orders from offshore wind power, solar power, ultra-high voltage and high voltage projects.

An SMM survey released on Sunday April 28 showed that the average operating rate across 23 Chinese manufacturers of wires and cables, with total capacity of 1.55 million mt/year, rose 3.75 percentage points from March to stand at 87.81% in April, down 1.31 percentage points from a year ago.

Deliveries for the bids from medium- and low-voltage projects slightly expanded this month, which also helped lift the operating rate.

The month-on-month growth in April’s operating rate came in smaller than previous years as wire and cable buyers rushed to place orders in late March to get invoices with value-added tax of 16% before lower taxes took effect from April.

Wire and cable producers told SMM that consumption this year came in weaker than expected, due to poor orders from housing and infrastructure sectors. Cash flow issues continued to vex some producers, and they had to plan production on sales and rein in inventories.

The ratio of raw materials inventories to monthly production across those surveyed wire and cable producers slipped 0.51 percentage point to 21.64% in April as production expanded and as stocks of raw materials grew less.

Producers told SMM that they scaled back recent procurement, given uncertainties about future consumption.

Operating rates across wire and cable producers in China are expected to inch up 0.45 percentage point month on month to stand at 88.26% in May, down 2.73 percentage points year on year.

Uncertainties surrounding policies over automobile and power cable sectors drive producers to take a wait-and-see stance and continue to plan production on sales.