SHANGHAI, Mar. 21 (SMM) –
A recent SMM survey of 16 major domestic copper tube/pipe producers (total capacity: 1.04 million mt/yr) revealed the following insights:
1) Operating Rates Up Significantly in March
According to the survey, the average operating rate at the 16 major domestic copper tube/pipe producers was 82.4% in March, up 6.8% from January’s 75.6%, and also up greatly on a yearly basis. Several factors are behind these increases in operating rates. First, the air-conditioning sector, a major consumer of copper tube/pipe is now entering a traditional peak demand period, increasing demand for copper tube/pipe. Second, copper price corrections in March, especially as spot prices fell below RMB 70,000/mt, encouraged downstream producers to make purchases. Third, downstream producers were generally eager to replenish goods at low prices as the peak demand period begins.
2) Raw Material Inventories Up
The survey also shows raw material inventories in March were 20.9% of production at the surveyed producers, up 4.7% from January’s 16.2%. These higher raw material inventories were closely related to aggressive buying over the past several days while prices were low and downstream demand was growing.
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