SHANGHAI, Jul 12 (SMM) – Chinese manufacturers of aluminium wires and cables stepped up their operations in June, to fulfill orders, which was bolstered by a slew of ultra-high voltage projects issued in the first quarter of the year.
The latest SMM survey showed that the average operating rate across Chinese aluminium wire and cable producers rose about 3 percentage points from May and 5 percentage points from June 2018 to stand at 48.33% in June.
Production of aluminium wires and cables across large producers are expected to remain barely changed in July.
Producers in Henan are expected to deliver orders for ultra-high voltage projects in July-September, with those in Jiangsu in August-October. High temperature and rainfall, however, might delay shipments.
Despite high inventories of finished goods, aluminium wire and cable producers now see higher stocks of raw materials, probably due to eased cash flow pressure.
Processing fees for aluminium rod received a boost from such robust consumption.
In the month through July 9, the average aluminium rod processing fees in Shandong rose 130-150 yuan/mt from a month ago, with that in Henan up 160 yuan/mt and that in Inner Mongolia up 155 yuan/mt, SMM assessments showed.
Weaker aluminium prices and a decline in supply from Henan also helped buoy processing fees for aluminium rod in the past month.
Aluminium rod producers in Jiaozuo of Henan were required to cut production in June, due to environmental-protection concerns.
Processing fees for aluminium rod are expected to fall, but with limited downside room, as sufficient supplies of molten aluminium in July-August will bolster supply.
