SMM Cu Survey: Operating Rates Fall Significantly at Domestic Wire and Cable Producers

SHANGHAI, Aug. 9 (SMM) - A recent SMM survey of 19 major domestic wire and cable producers (total capacity: 824 kt) revealed the following insights: 
 
1)  Operating Rates Fall Significantly
According to the SMM survey, the average operating rate at the 19 domestic wire and cable producers was 77.9% in August, down 8.4% from June levels.  Wire and cable producers in the survey said declines in operating rates were within expectations as hot weather has significantly slowed construction, reducing demand for wire and cable.  In addition, orders received in August are traditionally the lowest of the year.   Orders for enameled wire were also down in August due to the approach of a seasonal low demand period for the motor, home appliance sectors.

2) Raw Material Inventories Remain Flat
The SMM survey also showed that the proportion of raw material inventories to production were 21.3% in August, slightly higher than the 20.0% in June, but a sign of stable inventories.  Some producers were active building up stocks when prices were between RMB 52,000-53,000/mt, generally consuming those stocks as prices rose, but later forced to replenish at current higher prices.  Other producers chose to replenish stocks after prices advanced to RMB 55,000/mt, while others purchased on an as-needed basis.  

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