Chinese Aluminum Wire and Cable Producers Report Higher Operating Rates in July

Operating rates at aluminum wire and cable producers in China averaged 74.19% in July, 1.45 percentage points higher than June, according to a survey. This is driven by an increase in raw material inventories and order books brought by growing investment in power grid construction.

Investment in power grid construction in China hit 28.7 billion yuan in July, up 4.1% year-on-year. YTD investment through July totaled 194.7 billion yuan, up 17.3% from a year ago. 3,095 kilometers of transmission line (≥220 KV) was constructed in July, down 6.6% year-on-year, compared with 23,586 kilometers through the first seven months, up 15.1% from a year earlier, data from the China Electricity Council (CEC) showed. 

State Grid Corporation of China (SGCC) initiated its fourth bid invitation this year for special conductor and regular ground wire on July 19. This includes regular conductor (≥330 KV), regular conductor (35-110 KV) as well as ground wire for Zhebei-Fuzhou UHV AC power transmission and transformation project.

The procurement volumes from SGCC dropped, while the number of bidders increased, causing bidders to obtain fewer orders from SGCC.

Slower payment from SGCC compounded liquidity crunch as wire and cable producers, forcing some smaller ones to tender for infrastructure projects from local governments.