60% Producers Expect October Orders to Stay Flat

SHANGHAI, Oct. 18 (SMM) –According to a recent SMM survey of major domestic copper tube/pipe producers, about 60% producers believe copper tube/pipe orders are unlikely to increase in October, and only 30% producers expect October orders to rise.

In the survey, about 60% producers believe copper tube/pipe orders for October to stay flat with September levels, since the high demand period hasn’t arrived yet in Q4. Driven by the “home appliances to the countryside” policy, sales volumes of air-conditioners and refrigerators increased aggressively in 2009 and 2010, and there was even overdraw consumption. Therefore, air-conditioner and refrigerator producers are currently consuming the existing inventories after restocking again in H1 2011, affecting demand for refrigeration pipes. Therefore, there is great possibility that copper tube/pipe consumption will remain sluggish during October, and most producers surveyed expect this situation will improve in November.

Only 30% producers in the survey are optimistic towards tube/pipe orders in October. Copper price slumps during September reinforced downstream enterprises’ wait-and-see sentiment, thus depressing orders. Should copper prices narrowly fluctuate around RMB 55,000/mt during October, tube/pipe orders will increase.

Approximately 5% producers believe tube/pipe orders will fall in October since downstream enterprises are reluctant to make purchases due to unclear copper price trends and tight cash flow problems.

The remaining 5% producers can’t predict about tube/pipe orders in October, since they believe tube/pipe consumption is closely related with copper price fluctuations.