China’s Cable Industry in H1 2026: Demand Shifts Toward AI and New Energy

Source: SMM Analysis

China’s cable industry saw a clear “post-holiday rebound followed by a gradual slowdown after the peak season” during the first half of 2026. At the beginning of the year, operating rates fell to 27.72% amid the Spring Festival holiday and elevated copper prices. As power-grid projects moved into concentrated delivery phases and copper prices temporarily eased, operating rates recovered rapidly. However, renewed gains in copper prices, together with the traditional off-season, gradually weighed on production activity.

Overall, the first half of 2026 saw a continued shift in China’s cable demand structure. Power-grid investment remained a key source of demand, while emerging sectors such as renewable energy, AI data centers, energy storage, electric vehicles, and offshore wind power continued to generate new demand and reshape the market.

Power-Grid Investment Remains a Key Demand Driver

Copper price volatility was one of the main factors shaping production and purchasing activity across China’s cable industry during the first half of the year.

As projects under China’s 15th Five-Year Plan began moving into implementation, investment in power-grid infrastructure provided a relatively stable source of demand. A temporary decline in copper prices also encouraged downstream customers to replenish inventories, contributing to a rapid recovery in cable production.

Copper prices rebounded in the second quarter, however, which put some pressure on downstream purchasing appetite. At the same time, growing demand from renewable energy and AI-related applications provided additional support for cable production.

China’s demand structure is also changing. The share of traditional power-grid infrastructure cables has gradually declined, while demand for cables used in renewable-energy applications has increased significantly. Offshore wind power, energy storage systems, electric vehicles, and data centers are emerging as important growth areas, although the power grid remains a core pillar of overall cable demand.

According to SMM analysis, State Grid invested more than RMB 129 billion in fixed assets during the first quarter of 2026, representing a year-on-year increase of 37%. The investment helped drive a concentrated release of demand for cables and other power-infrastructure products.

AI Data Centers Emerge as a New Growth Engine

AI and data-center development are becoming increasingly important sources of demand for China’s cable industry.

The rapid expansion of AI computing capacity is driving continued investment in data centers, increasing demand for high-speed copper cables, power cables, and associated electrical infrastructure. SMM forecasts that copper demand from AI data centers will grow by 54.94% in 2026.

Demand for high-speed copper cables and power cables supporting data-center infrastructure has also continued to rise, keeping production schedules and capacity utilization relatively strong among relevant Chinese manufacturers.

The rapid development of AI infrastructure is therefore creating new opportunities for China’s cable industry, extending demand beyond traditional applications such as construction and conventional power infrastructure.

New Energy Continues to Support Cable Demand

The new-energy sector has also become an important growth area for China’s cable market.

Continued development in offshore wind power, energy storage, and electric vehicles is generating demand for power cables, flexible cables, charging infrastructure cables, and other specialized products.

Offshore wind and energy-storage projects typically require cables capable of operating under demanding environmental and technical conditions. Meanwhile, the continued penetration of electric vehicles is supporting demand for automotive wiring systems and EV charging cables.

In contrast, China’s real-estate and residential construction sectors remain relatively weak. Sluggish new housing starts and completions have weighed on demand for cables used in residential construction and home renovation, partly offsetting growth from AI and new-energy applications.

Rising Costs Put Pressure on Cable Manufacturers

Chinese cable manufacturers also faced increasing cost pressures during the first half of 2026.

In March, geopolitical tensions in overseas markets contributed to higher prices for certain cable accessories and auxiliary materials. At the same time, elevated industrial energy costs pushed up overall manufacturing expenses.

The sharp rise in copper prices in May further increased raw-material costs. For some orders, however, settlement prices were still linked to lower monthly copper averages from earlier periods. This mismatch between procurement costs and contract settlement prices put additional pressure on manufacturers’ margins.

Given the intense competition in China’s cable market, manufacturers have limited room to pass higher costs on to customers through price increases or premiums. As a result, small and mid-sized cable manufacturers faced greater pressure on profitability during the first half of the year.

China’s Cable Exports Remain Strong

China’s cable exports remained robust during the first half of 2026.

From January to May, China exported 1.2692 million metric tons of wire and cable, representing year-on-year growth of 8.12%. Copper cable exports reached 633,700 metric tons, up 15.6% year on year.

Australia, the Philippines, and Thailand were among China’s leading export destinations.

According to SMM analysis, infrastructure expansion and energy-transition projects in Southeast Asia, the Middle East, and Africa remained important drivers of demand for Chinese cable products. Meanwhile, grid modernization in Europe and the United States, together with investment in AI computing infrastructure, continued to create additional demand.

As overseas demand expands, Chinese cable manufacturers are increasingly strengthening international sales channels, project development capabilities, and localized market services.

By comparison, China’s cable imports remained relatively limited. From January to May, China imported approximately 53,400 metric tons of wire and cable, primarily serving as a supplement for high-end and specialized products.

H2 2026 Outlook: Demand Growth Becomes Increasingly Segmented

Looking ahead to the second half of 2026, copper prices are expected to remain a key variable influencing China’s cable market.

If copper prices remain elevated, downstream customers may continue to limit inventory purchases, potentially restricting the pace of demand recovery during the traditional peak season. With real estate and residential construction demand remaining weak, customers are likely to maintain cautious procurement strategies, including order-based copper purchasing and purchases focused on immediate requirements.

At the same time, power-grid investment is expected to remain a major source of demand. As China moves into the first year of its 15th Five-Year Plan, tendering for ultra-high-voltage transmission and distribution-grid projects is accelerating. Concentrated project deliveries could provide solid support for cable demand, particularly in the fourth quarter.

Emerging sectors are also expected to maintain relatively strong momentum. Demand for copper cables used in AI data centers continues to expand, while offshore wind and energy-storage projects are expected to generate sustained demand for specialized cables. Rising EV penetration should also support continued growth in automotive wiring systems and EV charging cables.

Overseas Markets Remain an Important Growth Opportunity

China’s strong cable export performance in the first half of 2026 is expected to provide continued support in the second half.

Grid modernization and AI infrastructure investment in Europe and the United States, combined with infrastructure development and energy-transition projects across Southeast Asia, the Middle East, and Africa, are creating continued demand for imported cable products.

At the same time, Chinese cable manufacturers are expanding their overseas presence, strengthening local sales channels, and improving their ability to serve international projects. These developments are creating further opportunities for Chinese cable products in global markets.

Overall, SMM analysis indicates that China’s cable industry will continue to experience a more segmented demand structure in H2 2026. While real estate and traditional construction applications remain under pressure, power-grid investment, renewable energy, AI data centers, energy storage, electric vehicles, and overseas infrastructure are expected to remain important sources of demand.

As electrification, digitalization, and the global energy transition continue to advance, China’s cable industry is gradually expanding beyond traditional infrastructure applications toward new-energy systems, advanced power infrastructure, and the rapidly growing digital economy.

Source: SMM (Shanghai Metals Market) Analysis, 2026.