Over 200,000 mt of Aluminum Wire and Cable Orders Are Expected to Be Finalized, Creating Momentum Relay for UHV Power Transmission and Transformation Orders [SMM Analysis]

Published: Feb 16, 2025 11:20

Save

February 15, 2025— The State Grid released over 200,000 mt of aluminum wire and cable orders at the beginning of 2025, including 130,000 mt from ultra-high voltage (UHV) projects and 80,000 mt from power transmission and transformation projects, injecting a strong boost into the industry chain. SMM believes that the current order structure is reshaping the industry cycle: the short-cycle, fast delivery of power transmission and transformation projects (production preparation in April, delivery in May-June) and the long-cycle, stable demand of UHV projects (continuous release starting in August) form a momentum relay. Considering that the State Grid's tendering process started 2-3 months earlier than in previous years, a new round of order releases is expected by the end of Q2. Coupled with the implementation of the 650 billion annual investment target, the aluminum wire and cable industry is likely to emerge from the "order gap period" and achieve a systemic rebound in capacity utilisation rate in H2.

February 16, 2025

Data from the National Energy Administration showed that investment in power grid projects exceeded 608.3 billion yuan in 2024, up 15.2% YoY, marking a record high in recent years. With the State Grid's investment scale in 2025 targeting a historical peak of 650 billion yuan, the ultra-high voltage (UHV) sector is becoming the main battlefield for investment. Notably, against the backdrop of an overall positive industry trend, aluminum wire and cable enterprises are undergoing structural adjustments—despite the YoY contraction in UHV conductor and ground wire tender volumes in 2024, which pressured post-holiday operations, the State Grid released over 200,000 mt of aluminum wire and cable orders at the beginning of 2025. Among these, UHV projects accounted for 130,000 mt, while transmission and transformation projects contributed 80,000 mt of core orders, injecting a strong boost into the industry chain.

Focusing on the first batch of UHV tenders in 2025, the 130,000 mt conductor and ground wire orders dominated by the Gansu~Zhejiang ±800kV and Phase IV of the Pingwei Power Plant projects featured JL1/GA steel-core aluminum stranded wires with conductivity ≥61.5% IACS as the most-traded type, which is expected to significantly boost market demand for high-conductivity aluminum rods (L1). Regarding the delivery schedule, the staggered delivery starting in August will continue until Q1 2026, providing medium and long-term capacity support. In contrast, the 73,000 mt JL3/GA orders (conductivity ≥62.5% IACS) for transmission and transformation projects, with a concentrated delivery window from May to June, will drive production stockpiling in April, becoming a key driver for the rebound in Q2 operating rates.

SMM believes that the current order structure is reshaping the industry cycle: the short-cycle quick delivery (April stockpiling/May-June delivery) of transmission and transformation projects and the long-cycle stable demand (continuous release starting in August) of UHV projects form a momentum relay. Considering that the State Grid's tenders started 2-3 months earlier than in previous years, a new round of order releases is expected by the end of Q2. Coupled with the implementation of the 650 billion yuan annual investment target, the aluminum wire and cable industry is likely to emerge from the "order gap period" and achieve a systematic rebound in capacity utilization rates in H2.

Data Source Statement: Except for publicly available information, all other data are processed by SMM based on publicly available information, market communication, and relying on SMM‘s internal database model. They are for reference only and do not constitute decision-making recommendations.

For any inquiries or to learn more information, please contact: lemonzhao@smm.cn

For more information on how to access our research reports, please contact:service.en@smm.cn

Related News

14 hours ago

Fed Governor Milan Pushes for Over 100 Basis Points Cut, Contradicts Barkin on Caution

Federal Reserve Governor Milan pointed out that it is necessary for the US Fed to cut interest rates by more than 100 basis points this year. At the same time, he is very much looking forward to the performance of Kevin Warsh as Fed Chairman. However, Richmond Fed President Barkin emphasized that monetary policy must remain cautious until inflation fully pulls back to the target level, thereby ensuring the stability of the labour market.

14 hours ago

Democratic Senators Demand Delay in Fed Nomination Amid Criminal Investigation

All 11 Democratic members of the US Senate Banking Committee jointly sent a letter to the committee's chairman, Tim Scott, requesting that all nomination processes for the prospective Fed Chairman, Kevin Warsh, be postponed until the criminal investigation into current Fed Chairman Powell and other board members is concluded. However, Scott stated that Warsh's confirmation was a done deal.

14 hours ago

Fed to Keep Large Banks' Capital Levels Unchanged, Postpones Stress Test Reforms Until 2027

The US Fed has announced that it will maintain the capital levels of large banks unchanged during the upcoming stress test cycle (corresponding to the 2026 cycle). At the same time, the US Fed is planning multidimensional reforms to this annual test, aiming to enhance its transparency. The US Fed's Vice Chair for Supervision, Bowman, revealed that adjustments to the stress capital buffer requirements for large banks will be postponed until 2027. This move is intended to provide the US Fed with sufficient time to evaluate potential flaws that may be exposed in its testing models when assessing banks' financial conditions under simulated economic downturn scenarios.

14 hours ago