An increase in ultra-high voltage projects across China during the year’s opening quarter prompted an increase in domestic production of aluminium wire and cable last month. Such was the story told by a survey of manufacturers by SMM reported late last week.
Per the survey, China’s average operating rate for aluminium wire and cable producers increased by 3 percent on the month and 5 percent on the year, averaging at 48.33 percent in June.
Though June’s numbers were up, the survey showed that aluminium wire and cable producers do not expect an appreciable rise over the current month.
Assuming no delays due to adverse weather, Henan’s aluminium wire and cable producers expect to deliver orders starting this month and carrying on through September, while Jiangsu’s producers plan to begin deliveries next month and completing them by September.
As a result of the spike in consumption, processing fees for aluminium wire and cable increased as well. Average processing fees in Shandong for June through last Tuesday increased by CNY130-150/month. Henan province saw a CNY160/month increase, while Inner Mongolia’s fees rose by CNY155/month.
SMM indicated that eased cash flow pressure likely resulted more available raw materials, increased inventories of finished goods notwithstanding. However, aluminium rod producers in Jiaozuo in Henan province faced mandatory production cuts prompted by environmental concerns.
Going forward, producers expect to see processing fees fall slightly, while adequate supplies of molten aluminium for the next two months is likely to swell supplies.