Chinese wire, cable producers operated at 93.26% in Oct

SHANGHAI, Nov 4 (SMM) – Chinese producers of wires and cables remained in high gear last month, as demand was supported by stable operations across projects in east and south China, the rush for state grid operators to meet annual purchasing targets, the Belt and Road Initiative and the rise of green energy.

An SMM survey showed that operating rates across Chinese wire and cable producers averaged 93.26% in October, down 0.19 percentage point from a month ago but up 7.05 percentage points from a year ago. The survey included 23 companies, with annual capacity totalling 1.55 million mt.

Improved industrial concentration contributed to the significant year-over-year increase in the operating rate for the survey, which saw large producers taking up the majority.

The operating rate edged down from September, as colder weather deterred construction of the projects in northeast and northwest China and took a toll on wire and cable demand.

The China Electricity Council said that the country invested a total of 295.3 billion yuan in national power grid construction in the first nine months of the year, which was down 12.5% from the same period a year earlier and accounted for only 57.6% of the annual target.

Stocks of raw materials at Chinese wire and cable producers dropped last month, with the ratio to monthly output decreasing 4.88 percentage points month on month to 24.51%, as higher copper prices and no signs of a substantial improvement in orders kept companies from restocking.

As smog season begins, the average operating rate across Chinese wire and cable producers is expected to slip 0.35 percentage point in November to 92.91%, some 6.71 percentage points higher than a year ago.

The operating rate will remain high this month, as a high consumption season continues and constructors will rush to meet annual targets with fewer than two months to go before 2019 ends. Demand will also remain supported by the Belt and Road infrastructure construction and new energy projects.