CRU: China Mobile tender awards cement record low prices

CRU: China Mobile tender awards cement record low prices

PR Newswire

LONDON, Sept. 16, 2020

LONDON, Sept. 16, 2020 /PRNewswire/ -- China Mobile recently released details regarding the awards of their 2020/2021 loose-tube tender. As expected, competition for the 119.2M F-Km tendered for was strong and has now driven bare fibre prices to record low levels.

China Mobile tender awards cement record low prices

From just a volume basis, there were a number of clear 'winners' and 'losers'. The 119.2M F-Km was split between a total of 14 companies with YOFC taking the top spot having been awarded a 19.44% share, equivalent to 23.2M F-Km. This is a significant improvement from the prior tender, where YOFC were only awarded 4.6M F-Km despite a relatively competitive bid. In this case, they certainly could be deemed a 'winner'. Regarding Futong, if we include their Tianjin Futong Xinmao Technology facility, their group total beats that of YOFC.

Conversely, ZTT, who were awarded the 3rd spot in last year's tender winning a 15.81% share equivalent to 16.6M F-Km, were awarded just 2.2% (or 2.6M F-Km) of the 2020/2021 tender. Regarding the awards to the other 'Big 5' companies, Fiberhome lost over 12M F-Km and Hengtong's total volumes were little changed.

While there are some individual 'winners' with respect to volumes awarded, overall, the price point to which this tender has been settled is worrying for many industry participants, not just in China, but internationally. YOFC led with the most competitive bid which equated to RMB39.23 / F-Km, when converted to US dollars, this stands at record low levels of just $5.61 / F-Km of standard loose-tube cable.

Read the full story:
https://www.crugroup.com/knowledge-and-insights/insights/2020/china-mobile-tender-awards-cement-record-low-prices/ 

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