China’s aluminium wire and cable producers’ operating rates decline 3.26 percentage points M-o-M to 26.63% in Feb’21

According to the Shanghai Metals Market, China’s aluminium wire and cable producers’ operating rates saw a decrease of 3.26 percentage points month-on-month to 26.63 per cent in February 2021. However, it reflected an increase over the year by 10.48 percentage points, found SMM.

The monthly decrease in China’s aluminium wire and cable operating rates could be attributed to the operation halt at most domestic wire and cable companies due to a holiday during February 8-18. Companies in north China were even closed till the end of February, resulting in lower production time, industry output, and fewer industry orders at small and medium-sized enterprises.

At present, leading companies have relatively saturated orders, with production schedules lesser than in previous years. Small and medium-sized enterprises have neither shown a significant improvement in their output in February.

Most of the wire and cable companies’ orders refer to the average aluminium prices of the previous month to sign the current month’s order contract. As the companies’ production schedules are less with insufficient raw material stocks before the Chinese New Year Holiday, the companies that signed orders and delivery made some losses. At present, wire and cable companies are mostly waiting and watching the raw material market and restocking at low prices.

However, with the resumption of the construction work in north China, cable demand is rebounding, supporting the recovery of wire and cable operating rates. Hence, the restocking enthusiasm is expected to increase.

SMM sees the operating rates of aluminium wire and cable companies to gain 9 percentage points in March 2021 to come in at 35.49 per cent (approx.).