Shanghai Metals Market research found that operating rates at Chinese manufacturers of aluminium wire and cable remained unchanged in November from a month ago at 86.2 per cent, but fell 0.77 percentage point from the corresponding period last year.
Although weaker consumptions of home appliances, property, and automobiles reduced orders across magnet wire producers in November, yet rates held stable in the said month given greater investment in power grid projects that bolstered demand.
Data from the China Electricity Council showed that China’s investment in power grid projects in January-October dropped 7.6 per cent compared to the year earlier. The year-on-year decline was 2 percentage points smaller than the drop in January-September.
Per the SMM survey, most producers belong to either medium or large companies whose products enjoy market recognition, which in turn helped average rates staying stable.
SMM showed the material inventory to output ratio across wire and cable producers came in at 21.92 per cent in November, down 2.45 percentage points from October as plants tended to empty existing stocks of raw materials as the year came to a close. Cash flow issues also kept them cautious in purchasing raw materials.
December is expected to witness a fall by 2.73 percentage point month-on-month to 83.47 per cent in average operating rate across Chinese manufactures of wire and cable, found SMM, due to weaker demand on poor weather conditions.