Aluminum wire and cable production maintained a robust momentum in April, with new orders added for UHV power transmission and transformation projects [SMM Analysis]

May 16, 2025

According to SMM statistics,the comprehensive operating rate of the domestic aluminum wire and cable industry reached 58.16% in April 2025, up 5.27% MoM from April and up 3.9% YoY from April last year, maintaining a prosperous operation trend since Q2. By enterprise size, the operating rate of large enterprises increased by 4.65% MoM to 73.56%, medium-sized enterprises rose by 5.5% MoM to 51.21%, and small enterprises improved by 7.63% MoM to 33.9%.

On the enterprise side, benefiting from the arrival of the power grid delivery cycle, the operating rates of large, medium, and small enterprises showed a significant growth trend. Coupled with the pullback in the center of aluminum prices, enterprises' orders on hand were profitable, driving production loads to climb and leading to continuous increases in operating rates.On raw material inventory, due to the restocking demand ahead of the Labour Day holiday at month-end April, factories intentionally stocked up before the holiday. However, due to the increase in operating rates, raw material inventories were consumed, and the raw material inventory ratio recorded 39%, slightly down by 1%.On finished product inventory, due to the delivery cycle in April, finished product inventories in factories showed a downward trend, with the finished product inventory ratio recording 16.3%, down by 12.06%.

On the order front, after the accelerated landing of the first batch of UHV power transmission and transformation tenders in Q1, the second batch of UHV material tenders also arrived. The new orders for UHV power transmission and transformation conductor and ground wire totaled 130,000 mt, officially announced at the end of April. The second batch of UHV materials is currently under tender, with a total of 147,000 mt of conductor wire orders, and the winning bid list is expected to be announced in mid-to-late May.On the delivery front, the first batch of UHV power transmission and transformation orders officially entered the delivery phase in early May, coupled with the execution phase of enterprises' previously reserved orders, driving a rebound in production and operating rates. The first batch of UHV orders will start delivery in August 2025, and the second batch will start delivery in December 2025. Combined with enterprises' orders on hand, a medium and long-term order relay is formed, and the development of the aluminum wire and cable industry remains positive.

On other orders, driven by PV policy stimulus,the installed PV capacity from January to March 2025 reached 59.71 GW, up 31% YoY, and the newly added PV installed capacity was 20.24 GW, up 124% YoY, boosting the consumption of the aluminum alloy wire and cable market. However, as it has preliminarily entered the policy period, restrictions on distributed PV may affect the aluminum alloy wire and cable market orders.

According to data from the National Energy Administration,the investment in power grid projects from January to March 2025 reached 95.6 billion yuan, up 24.8% YoY, showing a stable growth trend. In terms of ultra-high voltage projects, recently, the Longdong-Shandong ±800 kV ultra-high voltage DC project was completed and put into operation, the Shaanxi section of the Ningxia-Hunan ±800 kV ultra-high voltage DC transmission line was connected, and the Chongqing end of the Jinshang-Hubei ±800 kV ultra-high voltage transmission project was also fully connected. SMM believes that the aluminum wire and cable industry has officially entered a close delivery cycle, with the industry's operating rate expected to continue its upward trend. Supported by the relay of orders from ultra-high voltage and transmission projects, along with provincial distribution network agreement inventory and other orders, the aluminum wire and cable industry still has room for growth.

Considering the urgent issue of new energy consumption, ultra-high voltage project construction is accelerating, and the expansion of delivery demand is driving the steady rise of the aluminum wire and cable industry. However, attention should also be paid to the transmission effect of new PV installations on market orders under the influence of policies. It is expected that the aluminum wire and cable industry will continue its growth trend in May.