SMM Cu Survey: Operating Rates in September Flat with August Levels at Copper Tube/Pipe Producers

SHANGHAI, Oct. 17 (SMM) –A recent SMM survey of 20 major domestic copper tube/pipe producers (total capacity: 1.25 million mt/yr) revealed the following insights:

1) Operating Rates in September Flat with August Levels
The average operating rate during September at the 20 major domestic copper tube/pipe producers was 69.3%, virtually flat with August's 69.0%, but still near yearly low levels. Air-conditioner manufacturers, a major consumer of refrigeration pipes, accumulated some copper tube/pipe inventories from September 2010 to August 2011, while trading volumes for commercial houses remained low due to restrictions in the property sector, weakening demand for tube/pipe used in household appliances, including air-conditioners and refrigerators. Weak overseas markets also negatively affected exports of copper tubes/pipes and their terminal products, while the copper price slump during September was also a factor behind lower operating rates at copper tube/pipe producers. 

2) Copper Tube/Pipe Producers Make No Restocking In September
Among the 20 surveyed copper tube/pipe producers, four were surveyed before China's National Day holiday and the rest afterwards. Raw material inventories at all 20 producers were 23.6% in September, up from August's 18.8%, but only 18.1% at the 16 producers in the first week of October and basically flat with August levels. According to feedback from some producers, copper tube/pipe producers have little interest in restocking at present. In addition, the number of copper tube/pipe producers expressing uncertainty toward future copper prices is increasing, which is adding to producers' wait-and-see sentiment.