
As updated by Shanghai Metals Market, expectations of greater orders at downstream manufacturers of aluminium wire and cable drove them to stockpile aluminium rod as raw materials in the first week after the Chinese New Year break. This could be accounted for the increase in the processing charges of aluminium rod, SMM learned.
Post-holiday inventories at aluminium rod processors stood below than a year ago, as some cable and wire plants ordered cargoes ahead of CNY, and this also prompted aluminium rod processors to firm up offers.
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In the first post-CNY week ended February 15, in Shandong, average processing charges of aluminium rod rebounded some RMB70 per tonne from pre-holiday, to RMB320 per tonne as of February 15, with the lowest prices rising RMB90 per tonne.
In Shandong and Henan, average processing charges fell to a low of RMB260 per tonne and RMB255 per tonne as of February 1. The fees typically declined by some RMB100 per tonne during the week before Lunar New Year, SMM assessments showed.
While aluminium wire and cable manufacturers restocked, downstream demand has yet to recover completely. This will depress operating rate across those manufacturers this month.
Operating rates across Chinese aluminium wire and cable manufacturers averaged 32.8% in January. This was down 14 percentage points from a year ago.
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