According to SMM data, the operating rate of copper pipe & tube enterprises was 82.45% in March, up 23.71 percentage points MoM and down 2.78 percentage points YoY. The notable rebound in copper pipe & tube operating rates in March was mainly attributable to the following factors. A sharp drop in copper prices in March attracted end-users to lock in low prices ahead of time. Although the geopolitical situation in the Middle East remained uncertain, domestic sales stockpiling for air conditioners continued as normal. Large copper pipe & tube enterprises indicated that export orders for air conditioning tubes declined, and a clear trend in order performance would only emerge once geopolitical tensions eased. On the ex-China front, demand from the European market weakened. In March, large copper pipe & tube enterprises relied mainly on domestic sales for production, while medium-sized enterprises posted relatively strong operating rates mainly because some maintenance markets began stockpiling ahead of the peak season.
Looking ahead to April, the operating rate of copper pipe & tube enterprises is expected to be 78.55%, down 3.9 percentage points MoM and down 5.17 percentage points YoY. Affected by geopolitical conflicts and rising prices of raw materials such as plastics, export orders from some air conditioner enterprises to the Middle East weakened. According to ChinaIOL data, the domestic sales production schedule for air conditioners in April is expected to decline 0.5% YoY, and the export schedule is expected to decline 12.2% YoY, dragging down the operating rates of medium-to-large copper pipe & tube enterprises.
