Aluminum wire and cable producers to expand marketing outside power grid against tightening liquidity

Aluminum wire and cable producers in China are looking to expand marketing outside the power grid as the year-end liquidity crunch draws nearer, Shanghai Metals Market (SMM) has learned.

New settlement terms from the State Grid Corporation of China (SGCC) have exacerbated cash flow problems at China’s aluminum wire and cable producers. Unlike in years past, the SGCC began to pay in installments this year, dragging out its payment terms. One producer confirmed to SMM that the SGCC now pays a full year following the completion of grid construction projects. In most cases, suppliers only receive payment in full one year after SGCC projects enter normal operation. One company indicated that the SGCC is three years in arrears in its payments. This situation has driven many producers to aggressively step up marketing for aluminum wire and cable in the consumer and other infrastructure markets.

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