China's National Bureau of Statistics (NBS) announced on March 9th that the country's industrial producer price index (PPI) fell by 0.9% year-on-year in February.Importantly, this drop was 0.5 percentage points smaller than January's, making it the third month in a row that the downward trend has softened.On a month-on-month basis, the index edged up 0.4%, maintaining positive growth for five consecutive months.In my view, this trend isn't accidental-industry insiders point to a mix of effective macro policies, the rapid development of "AI +", green transformation efforts, and capacity control measures, all of which have helped turn around prices in some sectors and made the manufacturing recovery more evident.Dong Lijuan, chief statistician at the NBS, emphasized that macro policies have been steadily taking effect, fueling price increases in several key industries.The booming "AI +" trend, in particular, has been a major driver: prices for electronic components and materials rose by 4.9% year-on-year, control micro-motors by 1.6%, and service consumption robots by 0.7%.I believe this upward momentum in upstream AI-related industries will gradually ripple through the wire and cable industrial chain, likely boosting demand for high-value-added products such as special cables and control cables in the coming months.At the same time, ongoing capacity governance and crackdowns on cutthroat competition in key sectors have spurred a noticeable recovery in new energy-related prices.
Data shows photovoltaic equipment prices climbed 3.2% year-on-year, with the growth rate accelerating by 2.7 percentage points from the previous month.Even more encouraging, lithium-ion battery prices reversed a 1.1% year-on-year drop in January to a 0.2% increase-the first upturn after 33 straight months of decline.For the cable industry, this is a significant positive, as it directly translates to higher demand for specialized cables used in photovoltaics, energy storage, and new energy vehicles.International factors have also played a role, as Dong Lijuan noted.Rising global prices for non-ferrous metals and crude oil have pushed up domestic prices in related industries: petroleum and natural gas extraction rose 5.1% month-on-month, refined petroleum products 0.7%, and organic chemical raw materials 1.3%.Since copper and aluminum-key raw materials for cable production-are closely linked to non-ferrous metal price trends, a moderate recovery here should ease the pressure of excessive low-price competition in the cable industry and help stabilize the market.Overall, the narrowing PPI decline sends a strong positive signal to the cable industry.The growing demand for "AI +" and computing power will drive needs for data cables and optical cables, while the recovery in new energy will continue to boost photovoltaic and charging pile construction-creating new growth opportunities.As a company deeply embedded in the cable sector, Zhejiang Zhongjing Wire and Cable's focus on policy trends, technological innovation, and quality improvement is a smart strategy, in my opinion.This approach will help it capitalize on structural opportunities and achieve high-quality development as the industry rebounds.
