China's construction of UHV power lines to boost demand for aluminium wire, cable

China’s planned construction of ultra-high-voltage (UHV) power grid will keep demand robust for aluminium wire and cable before 2017, Shanghai Metals Market foresees.

China is already building, or has approved, more than half of a $100 billion network of high-voltage power lines to connect remote energy producing regions to the east coast, Reuters reported in August, citing a top official at the State Grid Corporation of China (SGCC).

The state grid will spend 620 billion yuan ($100 billion) by 2017 on 20 UHV lines spanning nearly 20,000 kilometers, Zhang Zhengling, deputy director of development and planning at the firm, told Reuters in an interview.

A majority of high voltage transmission lines use aluminium wire and cable, whereas little copper is consumed in such power lines, according to SMM’s research team.

Therefore, we anticipate demand for steel-cored aluminium strand and aluminium-clad steel wire to remain robust before 2017 and producers of such wire and cables to benefit.

Leading power cable producer Jiangnan Group Ltd, for instance, plans to double its UHV-cable production capacity next year.

China is experiencing an investment wave in aluminium power cables with overcapacity looming in the sector, SMM reported earlier this month, citing a top executive from Shanghai Shenghua Cable Group.

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