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[SMM analysis] the stimulus of electric power infrastructure is obvious. In April, the operating rate of cable enterprises rose strongly to more than 100%.
Apr 30,2020 18:14CST
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Source:SMM
The content below was translated by Tencent automatically for reference.

SMM4, 30th:

The operating rate of cable enterprises in April was 100.44%.

According to SMM research data, the operating rate of cable enterprises in April was 100.44%, an increase of 24.61 percentage points from the previous month and 12.63 percentage points from the same period last year. Among them, the operating rate of large enterprises is 110.03%, that of medium-sized enterprises is 57.58%, and that of small enterprises is 66.45%. In April, the comprehensive operation rate of cable enterprises rebounded sharply from the previous month, and there was also a significant increase in the same period last year. In terms of orders, enterprises generally reflected that under the stimulus of the country relying on infrastructure to stabilize the economy, orders from the national network, the South Power Grid, and the state engineering category improved significantly, and orders in the real estate and home decoration industry also gradually resumed work in April. Orders in other industries, such as home appliances and automobiles, have improved month-on-month. In addition, May-June will soon enter the national network order centralized delivery date, driven by the peak season of the industry, cable industry orders also showed strong growth. On the export side, the export business downstream of the cable has been generally affected, resulting in a decrease in the number of orders from some cable factories, but the impact is not obvious because of the small volume of exports.

In terms of finished product inventory, with the improvement of downstream consumption and the acceleration of pick-up speed, most enterprises began to enter the slow storage stage after mid-April, a few have returned to the normal inventory level, inventory level has declined from the peak, but the whole is still at a high level, some enterprises are still facing great pressure on finished product inventory. From the point of view of sub-enterprises, the cable industry still shows a very obvious industrial concentration effect. The head enterprises with a capacity of more than 100000 tons basically produce at full capacity in April, the output even reaches a record high, and the operating rate reaches 110%. However, the performance of small and medium-sized enterprises is uneven, and the industrial concentration effect is also one of the important reasons why the operating rate of cable enterprises exceeds expectations. (research enterprises: 23, production capacity: 1.55 million tons)

In April, the raw material inventory ratio of cable enterprises was 16.47%.

In April, the raw material inventory ratio of cable enterprises was 16.47%, a decrease of 8.58 percentage points compared with the previous month. Cable factory production accelerated in April, production rebounded month-on-month, raw material inventory fell month-on-month.

The operating rate of cable enterprises is expected to be 103.11% in May.

According to SMM research, the operating rate of cable enterprises is expected to be 103.11% in May, an increase of 2.66 percentage points from the previous month and 11.04 percentage points from the same period last year. At present, cable downstream consumption is strong, most corporate orders have been received until mid-May to the end of May, the start-up rate is expected to remain high in May. Orders in April-May beat market expectations, but companies are generally cautious about orders after May. On the one hand, the current performance of orders has the phenomenon of concentrated rush after the resumption of work, in addition, it does not rule out the existence of downstream low price advance procurement, tax reduction expected hoarding and downstream raw material finished product inventory backlog, real consumption may not be as good as the start-up rate reflects. On the other hand, under the worry of the domestic economic downturn and the rising unemployment rate, the actual consumption of copper in the later stage led to limited copper consumption.

(SMM Wei Xue)

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