SHANGHAI, Aug 12 (SMM) - According to SMM survey, operating rate in the aluminium wire and cable sector stood at 41.12% in July, a decrease of 0.2 percentage point from June, but up 0.4 percentage point year-on-year.

The SMM average monthly spot aluminium price in east China stood at 19,023 yuan/mt in July, an increase of 414 yuan/mt from June. Cost pressure and high temperature lowered operating rate.

The delivery of some high-voltage transmission lines to the State Grid was postponed to July. However, most companies reported less order delivery than in June. Orders on hand are mostly for delivery from the end of August to October.

Large companies reported higher production and growing new orders by leveraging on their financial strength, while smaller companies performed poorly due to losses arising from rising raw material prices. 

Production in Jiangsu and Zhejiang was slightly affected by typhoon in late July, but subsequently recovered rapidly. Severe flooding disrupted production in Zhengzhou and Jiaozuo in Henan Province.

Operating rate in south China continued to decline due to fewer projects from China Southern Power Grid, high temperature and power curtailment. The State Grid rarely issued tenders for UHV projects in July. Most of the current orders are UHV DC power transmission projects.

The length of China’s newly built 220KV aluminium power transmission lines was 6,912 km in June, soaring 123% month-on-month, and amounted to 19,882 km in H1, up 36.5% year-on-year. Attention will be focused on the progress of bid invitations for UHV projects in H2.

Falling new orders amid rising aluminium prices will prevent operating rate from rising significantly in August. However, delivery of backlog orders after high temperature is gone may allow operating rate to recover to 45%.