Operating rates across wire, cable producers dip slower than expected in Aug 

SHANGHAI, Sep 4 (SMM) – The average operating rates across Chinese manufacturers of wires and cables slipped from a month ago in August due to a seasonal lull, but the decline came slower than SMM expectations, underpinned by brisk orders from downstream sectors of solar photovoltaic and super-high pressure cable. 

The latest SMM survey showed that the average run-rate across Chinese wire and cable producers fell 0.32 percentage point from July to stand at 91.16% in August. This was 2.72 percentage points higher from a year ago.

As China’s wire, cable industry became increasingly concentrated to large companies, medium-sized and small producers struggled to maintain normal operation on smaller orders and cash flow burden in a slack season, and this accounted for the lower rates in August. 

The ratio of raw materials inventories to monthly output at Chinese wire and cable producers decreased 1.7 percentage points on the month to 25.63% in August, as fluctuated copper prices and mixed outlook kept producers cautious about stockpiling. Inventories of finished products stood at highs across copper rod producers, SMM learned. 

For September, the average operating rate is expected to rebound 1.13 percentage points month on month to 92.29%, as orders improve on seasonality. SMM remains optimistic about downstream consumption from the power sector in the fourth quarter as investment in grid projects materialises.