SHANGHAI, Mar 30 (SMM) – Operating rates at wire and cable companies rebounded in March from February, driven by higher rates at large plants, SMM found. Orders grew and downstream consumers purchased actively, prompted by the recent low copper prices.
Resumption of orders across large producers of wire and cable also improved from last year, as output surged. Meanwhile, State Grid Corporation of China (SGCC) and China Southern Power Grid are tendering for wires and cables, and orders from home appliances and high-speed rail remain at high-season levels.
However, smaller producers have yet to see a jump in orders. In March 2017, cables from Aokai were found to be defective and this affected the entire wire and cable industry as more orders were placed with large plants because of quality. This resulted in low operating rates across smaller producers.
Consumption in south China was significantly higher than that in the north, SMM found. Sources expect consumption in north China to recover in May and June. For now, consumption remains tepid despite the warmer weather.
Separately, SGCC plans to invest 498 billion yuan in power grids in 2018, up 7% from a year before. We see a boom in the consumption of copper wires and cables as construction ramps up across urban distribution networks.
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