The aluminum wire and cable industry is steadily rebounding, and the processing fee for aluminum rods is shifting upward. [SMM Analysis]

March 28, 2025

This week, the operating rate of leading enterprises in the domestic aluminum wire and cable industry was 60%, up 2% WoW, maintaining an upward trend. Recent operating data shows that the operating rate in the aluminum wire and cable industry is steadily increasing, primarily due to the approaching concentrated delivery phase of power grid project-related orders in April, coupled with the landing of new orders. Enterprises are intentionally rushing to deliver orders in advance to increase finished product inventories. As the construction progress of UHV and power transmission and transformation projects accelerates, the pressure for cargo pick-up is expected to increase daily, forcing enterprises to improve capacity utilization rates, and the operating rate will continue to rise.

In terms of new orders, since the beginning of the year, the State Grid's UHV power transmission and transformation projects have directly brought in over 200,000 mt of orders, followed by joint tender announcements from provincial grids, the second batch of material tender announcements for power transmission and transformation, and public tenders for orders from various provincial grids. The pace of order fulfillment in 2025 is accelerating, with the expectation of completing power grid project investments exceeding 650 billion yuan in 2025 being realized faster. Additionally, the "rush for installations" trend in PV across various regions and the vigorous performance of new energy grid connection orders are driving the positive development of the aluminum alloy wire and cable market.

In terms of aluminum rods, the supply side of aluminum rods has shown a steady upward trend since the beginning of the year, with industry capacity maintaining a mild upward trend. At least 180,000 mt of new capacity is expected to be added in the first half of 2025, distributed in Xinjiang, Guizhou, Gansu, and Sichuan. As April approaches, due to market optimism about future aluminum rod consumption and the recovery of downstream wire and cable factory operations, in-plant inventory of aluminum rods has shown a rapid decline. Manufacturers indicated that there was a significant accumulation of in-plant inventory at the beginning of the year, but within nearly one and a half months after the Spring Festival, the in-plant inventory was almost completely cleared. Market transactions have shifted from price-cutting sales to pre-sale orders, and there is upward momentum in processing fees.In terms of processing fees, the ex-factory monthly average price of 1A60 processing fees in Shandong in March was 295 yuan/mt, down 5 yuan/mt from February; the ex-factory monthly average price in Henan was 332 yuan/mt, down 63 yuan/mt from February; the ex-factory monthly average price in Inner Mongolia was 155 yuan/mt, down 3 yuan/mt from February. Among the three major mainstream traders, the delivered monthly average price in Hebei was 337.5 yuan/mt, up 4 yuan/mt; the delivered monthly average price in Jiangsu was 437.5 yuan/mt, up 4.5 yuan/mt; the delivered monthly average price in Guangdong was 527 yuan/mt, down 34 yuan/mt.